California regulator calls on DOJ to bar medical health insurance mega-merger
California's top insurance regulator on Thursday urged the feds to block Aetna's proposed $37 billion deal for rival health insurer Humana, saying the merger could hurt millions of seniors.
Insurance Commissioner Dave Jones said a tie-up of these two insurance giants would reduce competition within the state's already heavily concentrated health insurance market.
In particular, it would affect seniors who depend on Medicare Advantage. A merged Aetna-Humana might have 26 percent of Advantage enrollees in the US, a lot more than any other insurer, according to Jones' analysis.
While Jones does not have the ability to block the offer, his recommendation could carry weight with the Department of Justice that is reviewing the deal.
Earlier this month, Jones also known as around the DOJ to prevent the $54 billion mega-merger between rival health insurers Anthem and Cigna.
Aetna and Humana have proposed selling their Medicare Advantage Plans in certain territories to deal with competition concerns.
“Spinning off some portion of a company doesn't guarantee a spin-off entity can survive and compete,” Jones said during a press conference. “This have a negative impact for tens of millions of seniors over the United States.”
Earlier now, Shelley Rouillard, director from the California Department of Managed Health Care, said she would support the Aetna-Humana merger if Aetna agreed to certain remedies.