Aetna’s Humana acquisition will swell its Medicare Advantage business

In the largest acquisition of its type in the U.S. history of health insurance, Aetna announced plans to purchase rival Humana for $37 billion in cash and stock on July 3.

The deal gives Aetna control of Humana's Medicare Advantage business, which was privately run and accounted for about 30 percent of the Medicare population, according to an Aetna press release. Overall, 14 million new members will be added, including 3.2 million of whom are Medicare Advantage members.

"The complementary combination brings together Humana’s growing Medicare Advantage business with Aetna’s diversified portfolio and commercial capabilities to create a company serving the most seniors in the Medicare Advantage program and the second-largest managed care company in the United States," the companies said in a joint press release. "The combined entity will help drive better value and higher-quality health care by reducing administrative costs, leveraging best-in-breed practices from the two companies — including Humana’s chronic-care capabilities that measurably improve health outcomes for larger populations — and enabling the company to better compete with more cost effective products."

After the deal closes, Aetna will make Louisville, Ky., the headquarters for the Medicare, Medicaid and TRICARE businesses. Humana was founded in Louisville.

Read more about the acquisition on our sister-brand Healthcare Informatics. 

Read more about the acquistion in the BusinessWire press release here.

Topics: Medicare/Medicaid