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Aetna, Humana deal to be scrutinized by federal regulators

On Behalf of | Oct 29, 2015 | Mergers & Acquisitions

We previously highlighted the announcement that healthcare provider Aetna would be acquiring Humana in a $37 billion deal that would make the new company among the largest healthcare insurers in the country. Recently, shareholders for both companies approved the merger, which paves the way for the next step in the process.

Essentially, federal regulators will now analyze the deal to ensure that it passes muster under federal antitrust laws. While we don’t know how regulators will scrutinize the deal, it appears that doctors, hospitals and consumer advocate groups insist that regulators go through it with a fine toothed comb. 

According to a recent article, doctors and hospitals are concerned about the amount of control the new company would have over the growing “Advantage” Medicare market. Enrollment in Medicare Advantage Plus plans has grown significantly in the past few years as more baby boomers qualify for Medicare. As such similar private plans have become important money making tools for health care insurers. If the merger is approved, the new company is expected to cover more than 30 million Americans, with more than 17 million who qualify for Medicare being covered.

In announcing that shareholders had approved the merger, executives for Aetna and Humana did not discuss potential antitrust hurdles. Nevertheless, the transaction exemplifies the need for experienced legal counsel who can anticipate the regulatory hurdles and provide solutions that can make such transactions possible.

In the meantime, it remains to be seen how long regulators will take in analyzing the deal.