December 7, 2015
Palm Beach Post
Consumers may see their choices reduced for some plans but health giants Aetna and Humana said Monday they expect to save $1.25 billion through their proposed merger by 2018 and combined expertise will help them serve customers better, company officials told Florida regulators in a hearing.
In some cases it could reduce the number of choices the merged company can offer consumers in any given category, officials said. For example, the companies might now offer six Medicare Part D plans between the two of them, but that could condense to three within three years under rules that limit any one insurer’s offerings, they said.
Overall, the combined companies are “highly complementary” with Aetna’s extensive focus on commercial plans and Humana’s expertise in Medicare Advantage plans, said Fran Soistman, Aetna’s executive vice president of government services. The combination will help the companies remain “consumer-centric,” he said.
Few specifics emerged, however, on whether efficiency savings might translate to lower consumer premiums.
“There are pros, but the overall con is whether it negatively impacts consumer choice,” said Florida insurance consumer advocate Sha’Ron James.
Nor did company officials say much about possible job losses among the companies’ 15,000 Florida employees.
Soistman said any merger and acquisition may involve possible consolidation, but Florida is an important market for both companies, he said. He said local presence in the state will “remain strong” and “employment will grow as we grow.”
The companies will look for “best practices” at either Humana or Aetna as they combine, Soistman said.
Aetna’s presentation included a report making the case the merger is not likely to harm competition, saying the merged firm will still control less than 20 percent of the state’s commercial market, for example. Humana already says it is Florida’s largest Medicare health benefits company with more than 900,000 Medicare members statewide, so its dominance in that market would only be enhanced.
The hearing Monday in Tallahassee discussed Aetna Inc.’s proposed acquisition of CarePlus Health Plans, Inc., Humana Health Insurance Company of Florida Inc., Humana Medical Plan Inc. and CompBenefits Co.
It is one of multiple state and federal reviews the merger must clear in coming months. Public comments remain open until Dec. 17.
A similar hearing for Anthem’s deal with Cigna is set for Tuesday.
Measured by premiums, Humana and Aetna seem poised to become Florida’s largest health insurance concern with more than $11 billion, though the market is fluid and the Florida Office of Insurance Regulation website shows 2013 totals.
Florida’s Biggest Health Insurers
1. UnitedHealth Grp $8.9 billion
2. BCBS Of Florida Grp $8.8 billion
3. Humana Grp $7.9 billion
4. Aetna Grp $3.5 billion
Source: Florida Office of Insurance Regulation, National Association of Insurance Commissioners, based on 2013 premiums.