by Justin Sayers, @_JustinSayers –
Louisville-based Humana released a joint statement with Aetna Tuesday morning announcing that both companies agreed to sell assets in an effort to ease concerns from the U.S. Justice Department over Aetna’s proposed $37 billion acquisition of Humana.
The two companies entered into separate agreements to sell part of their respective Medicare Advantage assets to California-based Molina Healthcare for a total estimated $117 million in cash, according to the release. The transactions are subject to successful completion of Connecticut-based Aetna’s proposed acquisition of the healthcare giant.
Molina Healthcare is expected to gain about 290,000 Medicare Advantage members in 21 states, which preserves “robust competition for seniors choosing to receive Medicare coverage through Medicare Advantage plans”. It also addresses 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, in the release.
“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.”
The decision comes less than two weeks after the U.S. Department of Justice joined several states in suing to block the proposed $37 billion deal for Aetna to acquire Humana. Both the complaint filed in federal court in the District of Columbia and comments from top regulators blasted the deal as a shortcut to profits and a “bum deal” for consumers.
According to the Tuesday release, the two companies remain committed to defending the transaction against the lawsuit. They said they are confident the transaction is in the best interest of consumers.
“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,” Bertoline and Broussard said in the release.
Justin Sayers can be reached at (502) 582-4252 or [email protected].
