Aetna's $37 billion deal to buy Humana could come under scrutiny because of its big combined share of the Medicare Advantage business in some states. Fred Katayama reports.
Look for regulators to closely comb through Aetna's $37 billion deal to take over Humana. It's the largest deal among health insurers, and the two are the first to make it to the altar. Anthem made an even bigger bid for Cigna last month that would make them the U.S.' biggest, but Cigna is playing hard to get. Aetna concedes that there's some overlap between the two companies. The merger would nearly triple Aetna's Medicare Advantage business, boosting its membership to 4.4 million. Aetna and Humana are in nine of the same states in that business. Combined, they would have 88 percent of the market in Kansas; 80 percent in West Virginia, 58 percent in Iowa, and 51 percent in Missouri. Legal experts say Justice officials will scrutinize the deal on a city-by-city basis. But Wall Street analysts expect the merger will get the blessing of regulators. Susquehanna Financial analyst Chris Rigg said, "While there are some concerns on potential anti-trust issues in certain marketplaces, we believe these matters are manageable." Investors driving up shares of Humana and pushing down those of Aetna.