The deal combines Humana's 3.2 million Medicare enrollees with Aetna's 1.26 million Medicare enrollees, giving the new combined company a strong position as the baby boomer population ages.
Healthcare giant Aetna announced Friday a $37 billion agreement to acquire Humana a deal that had been anticipated for weeks and moved forward after the US Supreme Court left intact a key piece of the Affordable Care Act last week.
The deal, which has been approved the boards of directors of both companies, continues the trend of consolidation that has swept the healthcare industry since passage of the ACA. Some fear that ongoing consolidation will thwart competition and drive up prices for consumers, undermining a key goal of the law.
Reports of the deal had been floated since the spring, but both sides awaited the outcome of King v. Burwell; on June 25, the Supreme Court ruled 6-3 that consumers in states without healthcare exchanges could still obtain financial assistance to buy coverage.
Aetna has benefited from the ACA and looks to keep up that trend in its acquisition of Humana, which is the nation’s second-largest provider of private Medicare coverage. New rules proposed by CMS will call for increase movement to payment reform in both Medicare and Medicaid, and for more seamless transitions for consumers who move between Medicaid and coverage on the exchanges that are purchased with tax subsidies. Thus, having strong footholds in all sectors of public coverage will prove beneficial, analysts have said.
While Aetna is currently the larger company by revenue, its number of Medicare enrollees is smaller at 1.26 million, compared with Humana’s 3.2 million. Value of this sector is expected to increase as the baby boomer population ages.
Current Aetna Chairman and CEO Mark Bertolini will serve in that role at the combined company. A conference call to discuss the deal is planned for Monday 8:30 a.m. ET.
Details of the deal were first disclosed in the Wall Street Journal.
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