- The health insurer Aetna said on Friday that it had agreed to acquire its smaller rival Humana for $37 billion in cash and stock, signaling the start of what may become a flurry of consolidation in the sector, according to a New York Times article.
- The deal would bring together two of the biggest health insurers in the United States, impacting how HR managers their health plans.
- The combined company would have estimated operating revenue of $115 billion this year and serve more than 33 million people, reports the Times.
According to the Times, the proposed merger occurs as the nation’s largest for-profit health insurers seek ways to reduce costs and capitalize on growing opportunities in the government and individual markets. The companies say they will be able to operate more efficiently and negotiate more effectively with large health systems, which have also been consolidating.
From the HR and benefits perspective, consolidation could negatively impact healthcare costs in terms of bargaining position. But the efficiencies, along with the expected growth of public healthcare exchanges resulting from Affordable Care Act's recent success with the Supreme Court, also could work in employers' favor.
The Times, in fact, says a push toward mergers received a continued incentive last week after the Supreme Court upheld the part of the Affordable Care Act that allows individuals to receive subsidies when they buy policies through HealthCare.gov, the online marketplace.