Read: Cigna rejects Anthem's takeover bid

Aetna made a formal bid this week in the form of cash and stock, the people said. While the exact offer details weren’t available, any proposal would probably value Humana above its $28 billion market capitalization as of Wednesday’s close.

Humana has received two offers, one from Aetna and another from Cigna, said another person. The Humana board prefers the offer from Aetna, the person said.

A representative for Humana didn’t respond to requests for comment. Representatives for Aetna and Cigna declined to comment.

Should Humana agree to sell itself to Cigna, it would run the risk of Cigna’s shareholders voting down a deal to try and persuade the company to sell itself to Anthem, which last weekend said it had offered to pay $184 a share for Cigna.

No agreement between Humana and Aetna has been reached, the people cautioned, adding that Humana could still agree to a different transaction, such as selling itself to Anthem, which has also previously expressed interest, or Cigna, the person said.

UnitedHealth Group Inc., the largest U.S. health insurer, could also make a bid for Aetna, complicating the situation even further. The U.S. health insurance sector is undergoing a period of intense deal activity, with the five largest insurers based on market value all working either to sell themselves or buy a rival.

Humana’s 3.2 million Medicare Advantage members have made it a target, as more Americans turn 65 and become eligible for the health program for the elderly and its private insurer-run version.

“Medicare Advantage is a coveted space,” Michael Bernstein, a partner at Baird Capital’s U.S. private equity team who focuses on health care, said in an interview. “To develop a similar scale in Medicare would take a great deal of work and time, which would be bypassed by making that transaction happen.”

Medicare Advantage membership is expected to rise to 68.4 million in 2023, up 26 percent from this year, according to the Centers for Medicare & Medicaid Services. Humana, based in Louisville, Kentucky, insures more than 14 million people through commercial, Medicare and Medicaid plans.

Some of the consolidation talk has been fueled by the Patient Protection and Affordable Care Act. Known as Obamacare, the 2010 law overhauled the U.S. health-care system with new rules that force insurers to look for efficiencies. The law also provided subsidies to help people afford insurance, creating millions of new customers that the companies are racing to capture.

Thurdsay’s Supreme Court decision upholding a key piece of the law helps remove a potential obstacle. The decision keeps U.S. subsidies flowing to more than 6 million people to help them afford health insurance from Aetna, Humana and other health insurers.

--With assistance from Ryan Sachetta in New York.

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