For insight on the impact of the proposed merger between Hartford, Conn.-based Aetna and Louisville, Ky.-based Humana, it may be helpful to look at one of Humana's previous transactions, according to a Louisville Business First report.
A report released this week by the Center for American Progress and The Capital Forum analyzes the 2012 merger of Humana and Arcadian Management Services. For the deal to go through, the Department of Justice required the companies to divest 15 plans that covered Medicare Advantage members across five states.
The DOJ intended for the divestment to preserve competition and hold down price increases. However, that plan failed, according to the CAP report.
Several of the divested plans saw premium increases and many were offered for less than two years after being divested, according to Louisville Business First.
Based on its analysis, the CAP report concludes "divestures will be insufficient to protect Medicare Advantage beneficiaries, taxpayers and the Medicare program. Past mergers demonstrate that they are an ineffective tool to preserve competition in Medicare Advantage markets."
Aetna disagrees with the findings in the CAP report. The health insurer told Louisville Business First that CAP's "analysis is based on flawed methodology and flawed facts, which results in misleading and inaccurate claims."
If the proposed merger goes through, Aetna said only 8 percent of U.S. seniors will get their health benefits from the combined company.
The merger between Aetna and Humana is expected to close in the second half of 2016.
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