Aetna proposes to divest certain parts of Medicare Advantage plans

Aetna today announced agreements to divest certain Medicare Advantage plans by selling some portions of plans representing about 290,000 enrollees in 21 states to Molina Healthcare Inc., to satisfy Department of Justice concerns about competitive concentration. Molina currently has 4.3 million health plan members, primarily in Medicaid managed care. The insurers’ agreements with Molina are subject to completion of Aetna’s proposed acquisition of Humana and regulatory approvals. Last month DOJ filed a lawsuit in federal court to block Aetna’s proposed acquisition of Humana, citing inadequate divestiture proposals as one reason to block the deal. DOJ also took action to block Anthem’s acquisition of Cigna, saying it would “substantially lessen competition, harming millions of American consumers, as well as doctors and hospitals.” Eight states and the District of Columbia joined DOJ in its action to block the Aetna-Humana deal, while 11 states and the District of Columbia joined the action to block the Anthem-Cigna deal. The deals, if allowed to proceed, would create three major national insurers where there are now five. AHA has vigorously urged DOJ to challenge both deals on the grounds that they would reduce competition and harm consumers and hospitals.