Aetna & Humana Merger

 In Group Health Insurance

Aetna & Humana merger

The healthcare industry is preparing for one of the most important moves

The Aetna & Humana merger;  two of the top five carriers in Texas. However, the US government filed lawsuit to block the deal, claiming antitrust laws and regulations are to be violated, and significantly delaying the process. The public opinion is divided between those who fear monopoly and those who expect an improvement in terms of service quality and area of coverage, once the merger is official.

Local Effects

Like in any other region of the country, healthcare provider in Houston would certainly feel the effects of the future  Aetna & Humana merger. These providers would need to reevaluate the conditions of the policies they intermediate. At this level, government voices raise the concern that fewer companies would generate less competition, higher premiums, and the slowdown of improvement and innovation.

Future Effect

A recent turn of events saw Aetna informing the Department of Justice that it might leave the Affordable Care Act (Obamacare) altogether if the deal is blocked. Aetna’s CEO Mark Bertolini explained that the Humana deal is crucial for the future of the company, as it allows important savings, funding and covering expansion into new territories across the US. Aetna initially planned to expand its operations to 20 states in 2017. If the deal is blocked, chances are the company will need to contract its presence to no more than 10 states. To put it in simpler terms, the lawsuit to block the Humana merger could deteriorate the trust of the investors, creating a considerable loss from public exchanges.

With the merger now stuck on the judge’s table, it is highly likely that the verdict would be given at the beginning of 2017. Inside a context that accommodates another possible merger between top five companies in the healthcare industry (Anthem and Cigna), and in the light of the failed Pfizer – Allergan deal, the solution for the case it one worth watching.

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