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Aetna-Humana deal will face scrutiny from state authorities

18 insurance commissioners, 3 attorneys general say they will study market effects of merger

While it's still unclear how likely federal regulators are to allow Aetna and Humana to merge, the multibillion-dollar deal will also have to pass muster with insurance commissioners and attorneys general in a slew of states, Reuters reports.

The two health insurance companies announced July 3 that they plan to combine their operations in a deal valued at about $37 billion, becoming the first two mega-insurers to make a move amid months of consolidation speculation.

News of the deal immediately set off antitrust concerns, though Aetna CEO Mark Bertolini has said that his legal advice indicates "this is a very manageable transaction." He also said he hoped federal regulators might go easier on Aetna and Humana given they were the first of the country's largest insurers to announce a deal--though that may not happen if Anthem and Cigna agree on a takeover deal soon. If that occurs, federal authorities will have to study the market effect of both deals, according to Reuters.

In addition, state attorneys general from Florida, Mississippi and Massachusetts as well as insurance commissioners in 18 states told Reuters they will join the feds in their scrutiny of the deal. The justice department is likely to take their concerns and data they provide into account given the large role states play in regulating health insurance.

One state official said he will approach scrutiny of the deal based on concerns about how it will affect consumers.

"I am generally concerned that historically health insurance company mergers have resulted in higher, not lower, premiums for consumers," California Insurance Commissioner Dave Jones told the news service, saying he plans to discuss implications of the deal with antitrust authorities and other states through the National Association of Insurance Commissioners.

An Aetna-Humana deal would give the combined company as much as 88 percent of the market share in Medicare Advantage business in Kansas, according to the article, and it would cover 68 percent of individuals covered under commercial insurance in Georgia. Both companies declined Reuters' request for comment about antitrust issues.

To learn more:
- read the article

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