Florida gives okay to major health insurance merger, with conditions

Florida insurance regulators have sounded approval for a merger that would shake up the market in personal and group health

Insurance News

By Lyle Adriano

The Florida Office of Insurance Regulation gave conditional approval to major health insurer Aetna’s purchase of rival Humana on Feb. 15. Both insurers are two of the four largest health insurance companies in the country.

The transaction price of the deal was not disclosed.

Aetna’s deal will give the insurer ownership of Humana’s stake in government-sponsored insurance programs like Medicare Advantage and Medicaid managed care.

Due to the purchased being approved, approximately one million Floridians covered by Humana and CarePlus health plans will not need to switch to other insurers, as it would “disrupt quality of services, benefits, networks, and cost-sharing provisions,” according to a statement by the office.

Officials ruled that the acquisition was not likely to diminish market competition in the state or create a monopoly.

State regulators approved the sale while imposing conditions, such as demanding Aetna’s presence on the ACA insurance exchange through offering its services to five new counties by 2018. Another condition stipulated was that the new merged company has to provide a plan for statewide expansion by 2020.

Prior to the merger, in 2016, Aetna offered five plans on the ACA exchange while Humana had 40 plans.

One of the other conditions for the approval required Aetna to agree to maintain fair treatment of individuals with HIV. Previously, Humana entered a similar agreement with the state in Dec. 2014 after civil rights advocates lodged a federal complaint claiming discrimination.

Although state regulators have conditionally approved Aetna’s deal, it is still being reviewed by the U.S. Department of Justice and the Florida Attorney General.
 

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