Aetna (NYSE:AET) and Humana Inc. (NYSE:HUM) today announced they have entered into separate agreements to sell certain of their respective Medicare Advantage assets to Molina Healthcare, Inc. (NYSE: MOH) for a total estimated $117 million in cash for both transactions, based on the estimated number of members in the plans involved in the transactions. The transactions are subject to the successful completion of Aetna’s proposed acquisition of Humana, CMS approvals and actions, and customary closing conditions, including state and other regulatory approvals.
As a result of the transactions, Molina is expected to gain approximately 290,000 Medicare Advantage members in 21 states, preserving robust competition for seniors choosing to receive Medicare coverage through Medicare Advantage plans and addressing a key concern of the U.S. Department of Justice in its challenge to the Aetna-Humana transaction.
“Our agreements with Molina promote competition within the large, diverse and highly regulated Medicare industry, and ensure that seniors continue to have an abundance of options when they decide how to receive Medicare coverage,” said Mark T. Bertolini, Aetna chairman and CEO, and Bruce Broussard, Humana president and CEO. “We believe that these divestitures taken together would address the Department of Justice’s perceived competitive concerns regarding Medicare Advantage. We are confident in Molina’s ability to deliver continued access to quality care for our members in these areas.”
On the Aetna-Humana combination, Bertolini and Broussard commented, “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 Medicare Advantage plans involved in the transactions include certain Aetna Medicare Advantage plans in Alabama, Arkansas, Florida, Georgia, Illinois, Louisiana, North Carolina, Nevada, Ohio, Oklahoma, Texas, Virginia and West Virginia, and certain Humana plans in Delaware, Illinois, Iowa, Kansas, Missouri, Nebraska, Ohio, Pennsylvania, South Dakota and Utah. Aetna and Humana expect to continue administering their respective plans involved in the transaction for a transition period following the closing to provide consistency for Medicare beneficiaries involved.
The companies remain committed to vigorously defending their pending transaction against a U.S. Department of Justice lawsuit seeking to block it. Aetna and Humana remain confident that their transaction is in the best interest of consumers, particularly seniors who elect to seek Medicare coverage through affordable, high-quality Medicare Advantage plans.