Insurer mergers make headway with state regulators

Editor's note: A previous version of this article missated which company Thomas McCarthy works for. He is the CFO of Cigna.

Two major insurance mergers are gradually gaining approval from state regulators, though the final approval of the mergers still depends on what could be a more demanding federal review.

On Monday, Florida became the 10th state to approve the Aetna-Humana merger, according to an announcement from Aetna. The deal still needs approval from 10 more states, but it also hinges on a decision from the Department of Justice (DOJ). Florida regulators did not require any divestitures as part of their review, but Aetna acknowledged that "it is possible that the Department of Justice will require divestitures in some geographies, which is a standard tool as part of its approval processes."

Aetna has invested heavily in convincing regulators to approve the merger, hiring four major lobbying firms, and even filing records of its official tweets about the deal. In January, a group of 15 state attorneys general joined the DOJ investigation of both mergers to assist in what many expect to be a complicated review.

Aetna said it was pleased with Florida's decision and that the Office of Regulation "recognized how traditional Medicare competes with Medicare Advantage plans, and that consumers have robust choice in a competitive landscape."

Not everyone has been satisfied with the approval process. In Kentucky, consumer groups balked at the state insurance commissioner's decision to approve the Aetna-Humana merger last week without a public hearing, according to Insider Louisville. Kentucky's previous insurance commissioner, Sharon P. Clark, told the news outlet in October that she didn't foresee problems with the deal, but she was planning to hold a public hearing in the spring. After announcing an approval of the deal, current commissioner Brian Maynard told IL the hearing would have been an "unnecessary formality."

Advocacy groups denounced the decision, citing the impact the deal will have on consumers and the potential for increased premiums, echoing previous calls by consumer groups for states to closely scrutinize both mergers.  

Meanwhile, Anthem's acquisition of Cigna has received approval from four of the 26 states reviewing the merger, but Cigna CFO Thomas McCarthy indicated that the process is playing out as expected, according to CNBC. Anthem CEO Joseph Swedish has previously said the company does not plan to make a divestiture proposal to the DOJ.

To learn more:
- here's the Aetna announcement
- here's the Florida Office of Insurance Regulation announcement
- read the CNBC story
- read the Insider Louisville story

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