A representative for Aetna declined to comment, while a spokesman for Humana didn’t respond to requests for comment.

The market for private health plans for the elderly, known as Medicare Advantage, has emerged as a focus of antitrust concern. An analysis by the Kaiser Family Foundation last July found that a combined Aetna-Humana would have at least half of all Medicare Advantage enrollees in 10 states, and at least two-thirds in five states.

Aging Population

Humana’s big position in the fast-growing Medicare Advantage market is a key piece of its appeal to Aetna. The policies are becoming more popular among U.S. seniors, and the industry is expanding as the population ages. Humana already has about 3.2 million Medicare Advantage health-plan clients, and Aetna has 1.3 million. Together, they’d be the largest provider of Medicare Advantage plans by a large margin.

California’s insurance commissioner called on the Justice Department to block the deal, citing reduced competition in markets for insurance plans in the state, including Medicare Advantage. The same state’s Department of Managed Health Care approved the transaction. In Missouri, the state insurance regulator found the deal would lead to too much concentration in the Medicare Advantage market. That leaves the door open for Aetna and Humana to submit a plan to remedy the issue.

Aetna has said other firms have expressed interest in the assets it may have to divest.

“Obviously, people, since we announced the transaction have expressed interest,” Karen Lynch, the company’s president, said at an investor conference on June 8. “When we are ready to have the conversations around divestitures there, we believe there’s a number of interested parties.”

Anthem-Cigna

The effort comes as health insurers Anthem Inc. and Cigna Corp. are pursuing their own $48 billion combination. The department has told Anthem that its planned purchase of Cigna threatens competition and probably can’t be fixed by selling parts of their businesses, people familiar with the matter said this week. Bill Baer, the No. 3 official at the Justice Department, has said the deals represent a “game changer” for the industry.

The Humana takeover has a higher probability of winning approval than reflected in market trading, according to Ira Gorsky, an analyst at Elevation LLC. While resolving antitrust issues in Anthem’s bid for Cigna would require “unmanageable” remedies, the Humana deal is easier to fix because it’s primarily about Medicare Advantage, which is based on distinct, local markets, Gorsky said.

“Humana has been unfairly tarred with the issues Cigna has,” Gorsky said in an interview on Bloomberg Television Friday. “It’s a much different transaction.”

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