Giant $37B health insurer merger not likely to close until December

Originally planned to take about a year, the marriage between two of the country’s largest carriers has been delayed six months

Insurance News

By

Ongoing pushback against the merger of two of the country’s largest health insurance companies has forced executives to revise their original timeline for the completion of the deal.

Last Friday, officials with Aetna Inc. informed federal regulators that they have agreed to extend the original deadline to complete their $37 billion acquisition of rival Humana by six months. The deal is now expected to close by December 31.

Humana spokesman Tom Noland stressed that the delay was “routine and expected,” and that both companies continue to expect completion by the second half of 2016 as outlined in the original announcement of the merger a year ago.

Yet increased scrutiny from state regulators and consumer advocacy groups has continued to dog the insurers’ plans. The US Department of Justice is still reviewing the mergers of both Aetna-Humana and their rivals, Anthem Inc. and Cigna Corp., and a growing number of groups are asking the DOJ to block the requests.

The most recent opponent of the Aetna-Humana pairing is California Insurance Commissioner Dave Jones, who issued a report last week claiming the merger is anticompetitive and will likely result in “increased prices, decreased availability of health insurance products and decreased quality and access to healthcare” for consumers.

A group of US senators including Elizabeth Warren and Al Franken have also spoken out against the merger, citing concerns over anti-trust infringement as well as job cuts, wage stagnation and the overall economy.

“We urge the DOJ to challenge these mergers from proceeding and to prevent the damage they would cause to competition and consumers,” the senators wrote earlier this month.

Both Aetna and Humana have defended the merger as providing customers with better care – not less choice.

“[The merger] will improve the healthcare system and offer consumers more choices and greater access to higher quality, more affordable care,” said Kristine Grow, an Aetna spokeswoman
The Justice Department has not yet given a timeline for decisions on either merger, but said deadlines could be negotiated and even extended under agreements between the Department and the insurers.


Related Stories:

Major industry figure urges DOJ to block $37B health merger
Antitrust regulators are skeptical over major health insurer merger

Keep up with the latest news and events

Join our mailing list, it’s free!