Aetna and Humana are scrambling to convince antitrust regulators in the U.S. Department of Justice that their proposed $34 billion merger won't hurt consumers by reducing competition in the health insurance market.
Until recently, officials at both companies expressed confidence that the deal would be approved, but the prospect of rejection appears to have increased dramatically in the past month, as consumer groups, political leaders and state and federal regulators have publicly and privately voiced concerns about the effects of such an enormous acquisition.
Perhaps the most significant display of opposition to the deal came from California Insurance Commissioner Dave Jones, who urged the feds last month to block the merger, citing the reduced competition it would create for millions of consumers in the nation's largest state.
Recommended For You
In private talks with federal officials, The Wall Street Journal reports, Aetna and Humana executives have suggested a willingness to sell off some assets in an attempt to reduce the size of the resulting company.
Although the Justice Department can't block the deal on its own, it could file a suit asking a federal judge to do so, setting up a court battle that the companies would obviously prefer to avoid.
The deal between Aetna and Humana is shaky, but appears to have a better shot at approval than an even larger ($48 billion) proposed merger between Anthem and Cigna.
Not only is the Aetna-Humana deal smaller, but because Humana's principal business is Medicare Advantage plans, many observers likely assumed that federal regulators would not view the merger as a major threat to the overall health insurance market.
And yet, it appears to be largely concerns about the effect of the deal on the burgeoning Medicare Advantage market that could ultimately block the merger. The two companies' combined share of that market is 24 percent and in some parts of the country the share is much larger.
In May, Missouri's insurance commissioner announced that if the Aetna-Humana deal goes through, the newly created company will be barred from selling a number of different insurance products in the state, including Medicare Advantage plans, saying that the merger would dramatically reduce competition in certain markets.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
