Is this why it’s called the “Show Me State”?

Federal regulators may ultimately approve the megamerger of Aetna and Humana, but the resulting insurance behemoth will not be welcome to do certain business in Missouri.

In an order, John Huff, the director of the state department of insurance, said that if the merger is ultimately approved at the federal level, Humana and Aetna will have to cease operations in Missouri “with respect to the Comprehensive Individual, Comprehensive Small Group, and Group Medicare Advantage Markets.”

The department found that the merger would not be a problem for a number of other insurance products that the two companies offer or may offer, including large employer group health, life insurance, property and casualty, large group employer health, small group employer health, and mini-meds plans.

In a Tuesday column for the St. Louis Post Dispatch urging the rejection of the deal, David Balto, an antitrust attorney, said that Humana, Aetna, and UnitedHealthcare already account for 83 percent of Missouri’s Medicare Advantage market.

The proposed $37 billion acquisition of Humana by Aetna, which has been approved by shareholders at both companies, is one of two enormous mergers being reviewed by federal regulators. The other is Anthem’s proposed $48 billion purchase of Cigna.

The Anthem-Cigna deal, reports the Wall Street Journal, is threatened by squabbles between the two parties. Cigna officials are worried that Anthem’s ongoing lawsuit against Express Scripts, the pharmacy benefit manager, over alleged overbilling, could threaten the merged company’s estimated value. Anthem officials feel the opposite is true.

Insurers have argued that mergers will allow them to become bigger, meaner negotiators with providers, allowing them to deliver lower cost care for consumers. Many consumer advocates don’t buy the argument, saying that insurers will have little incentive to deliver low cost plans or high quality service to members with so little competition.

Instant Insights /

Missouri denies Aetna-Humana merger in important health markets

More From HR Executive

Related Stories

Recommended For You