top of page

Aetna and Humana’s Divestiture “Solution” Is Nothing of the Sort. Here’s Why.

Remedies are unlikely to solve the competitive problems posed by the Anthem-Cigna and Aetna-Humana mergers, as we discussed in a white paper on the subject a few weeks ago. Aetna and Humana just announced that they are prepared to sell some assets to Molina Healthcare in an attempt to satisfy the Justice Department’s problems with the mergers. However, their proposed solution is woefully inadequate, and antitrust regulators and courts should recognize this.

Aetna and Humana said that they have entered into separate agreements to sell Medicare Advantage assets to Molina Healthcare for $117 million in cash for both transactions, based on the estimated number of members in the plans involved. In a public statement, the companies said that “Molina is expected to gain approximately 290,000 Medicare Advantage members in 21 states, preserving robust competition for seniors choosing to receive Medicare coverage through Medicare Advantage plans and addressing a key concern of the U.S. Department of Justice in its challenge to the Aetna-Humana transaction.” The transaction is subject to state and federal approval of the merger.

The proposed $37 billion Aetna-Humana merger will affect millions of Americans across the country. Aetna will also gain over 14 million total members, including 3.2 million Medicare Advantage members. The merging insurers claim that the divestiture of $117 million in Medicare Advantage assets will preserve competition and address DOJ’s concerns. However, $117 million worth of assets are a mere 0.3162% of the $37 billion merger. Moreover, the 290,000 lives that will be divested under this plan are only 9.06% of the 3.2 million Medicare Advantage members that Aetna will be gaining from this deal.

So, to sum up: despite the massive harm to competition and consumers that will result from this combination, Aetna and Humana claim that divestitures worth 0.3% of the merger’s total value and that cover 9% of the lives gained will solve these issues. That claim is not credible and frankly their proposed “solution” demeans our intelligence.

The Department of Justice, State Attorneys General, State Insurance Commissioners, and the District Court of Columbia should recognize this announcement for what it is—an attempt to gain approval of the merger that pays lip service to the idea of remedies but fix none of the merger’s problems. They should not be fooled. The Aetna-Humana merger is as anticompetitive and anti-consumer as ever. The lack of real remedy proposals that would actually solve problems shows that DOJ made the right call; the merger should be blocked.

Featured Posts
Recent Posts
Search By Tags
No tags yet.
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square
bottom of page