Health

Aetna to Buy Humana as Health Insurer Landscape Shifts

Published

9 years ago

July 3, 2015

In this Tuesday, Aug. 19, 2014, file photo, a sign for Aetna Inc., sits atop a building at the company headquarters in in Hartford, Conn. Health insurer Aetna Inc. has made a deal to buy competitor Humana Inc. in a $37 billion deal the companies say would create the second-largest managed care company, it was announced Friday, July 3, 2014. (AP Photo/Jessica Hill, File)

TOM MURPHY

Aetna aims to spend about $35 billion to buy rival Humana and become the latest health insurer bulking up on government business as the industry adjusts to the federal health care overhaul.

The proposed cash-and-stock deal, announced early Friday, would make Aetna a sizeable player in the rapidly growing Medicare Advantage business, which offers privately run versions of the federally funded health care program for the elderly and some people with disabilities.

The combination also would bolster Aetna’s presence in the state- and federally funded Medicaid program and Tricare coverage for military personnel and their families.

Health insurers are eager to do more business with government payers due in part to a Medicaid expansion fostered by the health care overhaul and Medicare Advantage’s surging enrollment. The overhaul is expanding Medicaid coverage in several states as it seeks to provide health coverage for millions of uninsured people.

Meanwhile, total enrollment in Medicare Advantage plans has tripled over the past decade to about 16.8 million people and is expected to keep growing as more baby boomers become eligible for the plans. Aetna’s acquisition of Humana would make it the largest provider of Medicare Advantage coverage, with 4.4 million members, a figure that could change depending on regulatory review.

“Government markets are the most rapidly growing aspect of the system,” said Dan Mendelson, CEO of the market research firm Avalere Health.

Hartford, Conn.-based Aetna announced its deal a day after the Medicaid coverage provider Centene Corp. said it would spend $6.3 billion to buy fellow insurer Health Net. That deal would help Centene expand in the nation’s biggest Medicaid market, California, and give it a Medicare presence in several western states.

In addition to these deals, the Blue Cross-Blue Shield carrier Anthem went public late last month with an offer of more than $47 billion for another insurer, Cigna.

Health insurers see more advantages to these big combinations than a chance to build their government portfolios.

Major acquisitions can offer an infusion of new business at time when growth has slowed in the biggest part of their business, employer-sponsored health coverage. Plus more employers are opting to pay their own insurance claims and hire insurers to administer the coverage. That’s a less lucrative line of work for managed care companies.

Big deals also allow companies to quickly diversify their products and cover more territory. They also can yield savings when the companies combine back-office functions and cut overlapping jobs.

Both Aetna and Anthem also have cited the potential to improve their technology as a major reason behind their deals. Insurers are working to develop more apps and other tools that customers can use to shop for health care, since plans are exposing those customers to bigger medical bills through high deductibles and other insurance expenses.

They also are using technology more to help monitor and improve patient care. The overhaul is accelerating a push in the industry to reimburse doctors and hospitals more based on the quality of care they provide instead of just shelling out a certain amount for each procedure performed.

“Any time an industry is changing … it requires investments to sort of successfully make that change,” said Shawn Guertin, Aetna’s chief financial officer.

The impact these big acquisitions have on consumers can be murky and likely won’t be felt for at least a year, because insurers have already finalized most of their plans for coverage that starts in January. A combination may lead to fewer choices and some price changes for consumers, depending on where they live and who already is in their market.

Aetna’s purchase price for Humana includes a combination of $125 in cash and $105.11 in Aetna shares for each Humana share. The total of about $230 per share, which is based on the closing price of Aetna’s stock Thursday, represents a premium of 29 percent to Humana’s trading price in late May, before The Wall Street Journal reported that it was an acquisition target.

The deal’s total value amounts to about $37 billion counting debt.

The combined company would be based in Hartford, Conn., led by Aetna Chairman and CEO Mark Bertolini and cover more than 33 million people. Only UnitedHealth Group Inc. and the Blue Cross-Blue Shield carrier Anthem Inc. cover more. A combined Aetna-Humana would be the second-largest insurer by revenue.

The deal is expected to close in the second half of next year.

Shares of Aetna and Humana closed at $125.51 and $187.50, respectively on Thursday. Markets were closed Friday for the July 4th holiday.

The shares of both companies, like several other insurers, have soared to all-time-high prices this year.

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California Black Media

Gov. Newsom Goes to Washington to Advocate for California Priorities

Gov. Gavin Newsom traveled to Washington, D.C., for meetings with senior Biden-Harris Administration officials and members of California’s congressional delegation. During the week, he pushed for increased resources to improve public safety and quality of life in California.

Published

1 week ago

November 26, 2024

Oakland Post

Gov. Newsom visits the White House on Nov. 14. Photo courtesy of Gov.Ca. Gov

By Bo Tefu, California Black Media

Gov. Gavin Newsom traveled to Washington, D.C., for meetings with senior Biden-Harris Administration officials and members of California’s congressional delegation.

During the week, he pushed for increased resources to improve public safety and quality of life in California.

“California is continuing our work to secure additional tools and resources to improve access to health care, clean air and water, and secure critical funding to support communities recovering from disasters,” said Newsom.

At the White House, Newsom met with President Joe Biden and key officials, advocating for disaster relief funding, healthcare expansion, and environmental protection. He also engaged in discussions with senior Biden-Harris officials, including Interior Secretary Deb Haaland, to address water quality improvements and the San Luis Dam project, which will support water supplies for two million Californians.

“Building on our strong partnership with the Biden-Harris Administration, California is working closely with the White House over the next two months to deliver the critical protections and resources our communities need,” Newsom said.

On Capitol Hill, Newsom met with California Senators Alex Padilla and Adam Schiff, along with other Congressional leaders, to emphasize the need to approve pending disaster funding, healthcare programs, and environmental protections. He also previewed California’s upcoming special session to proactively address potential federal challenges when President-elect Donald Trump is sworn into office.

Newsom’s discussions also focused on securing Medicaid waivers from the Center for Medicare & Medicaid Services (CMS) to enhance behavioral health services and reduce homelessness. The state seeks approval for the BH-CONNECT waiver, which would address behavioral health and homelessness, and the MCO Tax Waiver, which would provide over $20 billion for Medi-Cal to improve healthcare access.

Additionally, California is pushing for Clean Air Act waivers from the U.S. Environmental Protection Agency (EPA), which are crucial for enforcing air quality regulations. These measures are projected to prevent 11,000 premature deaths and provide $116 billion in health benefits over the next three decades, according to the Governor’s office.

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California Reports First Case of Mpox in the United States

On Nov. 16, the California Department of Public Health (CDPH), reported the first known case of clade 1 Mpox, previously known as Monkeypox, in the United States. However, the risk to the public remains low, according to the CDPH.

Published

1 week ago

November 26, 2024

Oakland Post

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By Bo Tefu, California Black Media

On Nov. 16, the California Department of Public Health (CDPH), reported the first known case of clade 1 Mpox, previously known as Monkeypox, in the United States.

However, the risk to the public remains low, according to the CDPH.

“This case was confirmed in an individual who recently traveled from Africa and is related to the ongoing outbreak of clade I mpox in Central and Eastern Africa,” reads a statement the CDPH released.

According to the DDPH, “The affected individual received health care in San Mateo County based on their travel history and symptoms. The individual is isolating at home and recovering.”

Public health workers are also conducting a contact tracing exercise and reaching out to people who have been in close proximity to the affected person.

“The mpox specimens from the traveler are being sent to the CDC for further laboratory testing,” the CDPH press release continues.

Californians can take a number of steps to prevent Mpox. Here’s more information:

Preventing Mpox Infection

It appears clade I mpox spreads in a similar manner as clade II mpox, through close (skin-skin), intimate and sexual contact. The identification of a potentially more severe mpox version in the United States is a good reminder for individuals who have certain risk factors to take preventive action, including:

Getting vaccinated if you may be at risk for mpox. For the greatest protection, make sure you get both doses of the vaccine. Find mpox vaccine (JYNNEOS) near you.
Taking precautions if you were exposed to mpox. Get the mpox vaccine before symptoms develop and consider avoiding intimate contact with others for 21 days. Watch yourself for symptoms and get tested if they develop.
Preventing spread if you have been told you have mpox. Avoid contact with others until the rash is healed, clean and disinfect shared areas in the home, and notify people who may have been exposed.
Talking to your sexual partner(s).
Avoiding skin-to-skin contact with those who have a rash or sores that look like mpox.
Not sharing items with someone who has mpox.
Washing your hands often.
Protecting yourself when caring for someone with mpox by using masks, gowns and gloves.

Visit the CDPH website to learn more about Mpox with Sexual Health Toolkits and a Campaign Materials Page.

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California Department of Aging Offers Free Resources for Family Caregivers in November

In honor of National Family Caregivers Month this November, the California Department of Aging (CDA) is spotlighting a range of free resources to support caregivers of older adults and individuals with disabilities. Through its extensive network of Caregiver Resource Centers (CRCs) and Area Agencies on Aging (AAAs), the state provides essential tools to help caregivers manage their responsibilities while prioritizing their own health and well-being.

Published

1 week ago

November 26, 2024

Oakland Post

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By Bo Tefu, California Black Media

“Caregiving is a great act of love, and this month — and every day — we uplift California’s caregivers as the under-recognized backbone of our families and communities,” said Susan DeMarois, director of the CDA. DeMarois emphasized the need for caregivers to access available support to better balance their roles without compromising their own health.

California is home to more than 4.5 million unpaid family caregivers, who contribute an estimated $81 billion annually in economic value through their care. Most caregivers are women who balance work, family, and caregiving responsibilities, often at the cost of their physical and emotional health. Given California’s aging population, the demand for caregiver support is rapidly growing, underscoring the importance of these free resources.

Thousands of caregivers accessed these services in the 2022-2023 fiscal year, benefiting from tools like professional care management and respite support. The Aging in California Resource Guide, available in six languages, offers additional information on caregiver support.

Caregivers can learn more about available resources by visiting the CDA website at aging.ca.gov and connecting with local CRCs or AAAs to discover personalized services to support them in their caregiving journey.