Aetna-Humana Merger Anti-Competitive?

Regulators in Missouri have raised a red flag on Aetna’s $34 billion acquisition of Humana, calling the deal anti-competitive for the state’s Medicare market. It’s the first hurdle in the state merger approval process the insurers have encountered. (CNBC)

A tie-up of Aetna Inc and Humana Inc would be anti-competitive in Missouri for several types of insurance, including individual Medicare Advantage plans where the combined company would have more than a 50 percent market share, the Missouri Department of Insurance said. (Reuters)

Missouri officials were most worried that competition in Medicare Advantage—Humana’s primary business and the key reason why Aetna struck the deal—would be stifled and therefore hurt seniors in the form of higher premiums. Aetna and Humana, combined, control 54% of the individual Medicare Advantage market in Missouri and 30% of the group Medicare Advantage market. There are 23 counties in Missouri where Aetna and Humana have more than 80% of the individual Medicare Advantage market. (Modern Healthcare)

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What is Medicare Advantage?