Humana Dives On Report DOJ Concerned About Aetna Takeover Bid

Humana Dives On Report DOJ Concerned About Aetna Takeover Bid

Humana Dives On Report DOJ Concerned About Aetna Takeover Bid

The insurers on Friday met with top government officials in a late-in-the-game attempt to make their case that the deal has public benefits and won't hurt consumers, and that they could address competitive concerns through asset sales, people familiar with the matter said.

Earlier this week, news broke that Aetna was preparing to divest some of its MA assets in order to assuage concerns about the deal's potential anticompetitive effects, increasing some analysts' optimism about the deal's likelihood of closing.

The meeting falls two weeks after a similar Justice Department session with Anthem and Cigna, which are pursuing their own $48 billion merger.

The rival companies were scheduled to meet Assistant Attorney General William Baer Friday to discuss "significant concerns" with the deal, reported trade publication MLex, citing unnamed sources.

One of the largest factors influencing health insurance costs is competition, the fewer insurers offering coverage in a given area, the higher the costs typically are.

Many analysts believed Aetna and Humana might have a better shot at offering concessions that would win over antitrust enforcers.

Humana was not immediately available for comment.

Aetna's purchase of Humana would combine two of the largest providers of Medicare Advantage plans for elderly people, and investors have always been concerned the deal might pose a competition issue for antitrust regulators.

Humana stock dropped $17.24, or 9.6 percent, to $162.74 and Aetna skidded $4.77, or 4 percent, to $115.47.

Aetna spokesman T.J. Crawford said by phone that the company continues to cooperate with the Justice Department.

Humana is a big player in the growing market for Medicare Advantage insurance, making it an appealing target for Aetna.

Aetna has argued that focusing on Medicare Advantage market share is misleading, since the majority of Medicare beneficiaries don't opt for the private plans - they choose traditional Medicare coverage offered directly by the federal government.

Aetna announced plans to buy Humana, which specializes in Medicare Advantage, a year ago for about $34 billion.

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