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Aetna, Humana Merger Gets Home State Approval

By Jad Chamseddine, CQ Roll Call

May 27, 2016 -- Consumer advocates in Connecticut are criticizing the state's insurance department for approving Aetna Inc.'s acquisition of fellow health care insurer Humana Inc. without a public hearing, pointing to potential job losses from the combination.

The Connecticut Campaign for Consumer Choice, which is made up of several organizations, expressed particular concern at the closed-door process in which the merger was approved, saying the department hurt consumers by "rubber stamping" the deal in the "dark of the night."

Insurance Commissioner Katharine Wade has been singled out by consumer advocates.

"She had tools to make this more public and to protect jobs in Connecticut, she has failed to use them and this is unconscionable," said Tom Swan, executive director of the Connecticut Citizen Action Group.

Swan added Aetna had already eliminated 10 percent of its job force in Connecticut and pointed to statements made by Aetna CEO Mark Bertolini that he wasn't committed to keeping Aetna's headquarters in Connecticut, and was considering a potential move to Kentucky, where Humana is located.

Frances Padila, the president of Universal Health Care Foundation of Connecticut, called the decision to approve the deal without including the public "shameful," saying it would lead to a bad precedent to exclude the public's input going forward when reviewing other mergers.

Aetna agreed to buy Humana last year for $37 billion in a stock-and-cash acquisition, in a deal that has been criticized by consumer advocates for the possibility of raising premiums and damping competition.

The deal is under review by the Justice Department and the attorneys general of individual states. It's also getting looked at by the insurance division of individual states, where the representatives of the merging parties have often appeared in public hearings to discuss the mergers' consequences.

Mathew Katz, the CEO of the Connecticut State Medical Society, was particularly concerned the deal would restrict access to care and lead to rising costs for Connecticut patients.

Connecticut's decision comes as Missouri expressed concern over the merger with its decision, finding the deal would be anti-competitive in four product areas. The Missouri Department of Insurance said the deal would reduce competition in the sale of individual health insurance, small group health insurance, group Medicare Advantage and individual Medicare advantage in about half of Missouri's counties.

Aetna called the decision a "setback" but vowed to work with Missouri to address the Insurance Department's concern. The decision in Missouri, however, won't stop the merger from going, unless it sets a precedent for other states to impose its own limits. Ultimately, the deal could be blocked outright by the Justice Department.

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