Aetna, Humana to sell Medicare Advantage business in 21 states to Molina in move meant to please regulators
The $117 million deal will only happen if regulators approve their merger.
As top insurers Aetna and Humana prepare to fight the U.S. Department of Justice over their planned mega-merger, the two companies this week announced plans to sell off portions their Medicare Advantage business to appease regulators.
The companies on Monday said they would sell the Medicare Advantage plans for 290,000 members across 21 states to Molina Healthcare in a deal worth a combined $117 million. However, the sale will only happen if regulators approve their merger.
The DOJ on July 21 filed an injunction to block the Aetna-Humana merger, as well as the pending merger of Cigna and Anthem, over concerns that the deals would give too much control over Americans' health insurance to just three companies.
[Also: DOJ sues to block Anthem/Cigna, Aetna/Humana mergers as companies plan to fight back]
"These mergers would fundamentally reshape the health insurance industry," Attorney General Loretta Lynch said in a statement. "They would leave much of the multi-trillion dollar health insurance industry in the hands of three mammoth insurance companies and restrict competition in key markets."
Aetna and Humana, however, believe the Medicare Advantage deal will help their cause.
"We believe that these divestitures taken together would address the Department of Justice's perceived competitive concerns regarding Medicare Advantage," Aetna CEO Mark T. Bertolini and Humana CEO Bruce Broussard said in a joint statement.
The Molina deal is also subject to regulatory approvals.
The companies, in their announcement, defended the pending merger as being in the best interest of consumers.
"We look forward to making our position clear in court, where the facts will show that our combination will result in a broader choice of products, access to higher quality and more affordable care, and a better overall experience for consumers," the CEOs said.
Twitter: @HenryPowderly
Contact the author: henry.powderly@himssmedia.com
