Aetna's proposed $1 billion acquisition of the health insurance business of Prudential Insurance Co. has hit speed bumps in at least five states, but officials insist the sale is still on target for a second-quarter close.
In fact, federal antitrust clearance could come as soon as this month.
Aetna completed its submission of additional documentation to the U.S. Justice Department on April 16. If the department deems the submission complete, the agency will have 20 days to approve or challenge the transaction unless both sides agree to an extension to review the documents.
Aetna filed for federal antitrust clearance in February, and the agency began a detailed antitrust investigation of the sale in March, when it requested more documents.
"Things are on schedule in terms of regulatory review," said Prudential spokesman Kevin Heine, although he acknowledged that objections to the merger have been raised primarily by physician associations in California, Florida, New Jersey and Texas. Concerns have also been raised in Pennsylvania.
"But there's nothing out of the ordinary and nothing that would hold up or postpone the merger," Heine said.
Officials at Aetna did not respond to phone calls.
Aetna, based in Hartford, Conn., announced last December that it had reached a definitive agreement with Newark, N.J.-based Prudential to buy Prudential's 6.6 million-enrollee Prudential HealthCare subsidiary for $1 billion.
Linking Prudential HealthCare with Aetna's managed-care unit, Aetna U.S. Healthcare, with 15.8 million enrollees, would create the nation's largest health insurer, with 22.4 million enrollees, including 18.4 million in managed-care plans.
In New Jersey, the state attorney general's office is investigating antitrust implications of the deal, according to spokesman Roger Shatzkin. The enhanced regulatory scrutiny in New Jersey, where the merged Aetna-Prudential organization would dominate health plans in the state, came after the American Medical Association and the Medical Society of New Jersey pressed for a close look at the merger.
Opponents of the deal say the combined organization would insure 60% of the HMO enrollees in Bergen County, N.J., and 38% of all HMO enrollees statewide. Aetna U.S. Healthcare is already New Jersey's largest managed-care plan.
The New Jersey probe follows a similar investigation launched by Pennsylvania's attorney general in February (Feb. 22, p. 26). That investigation is also pending.
In a public meeting last month, a senior official with the Texas Medical Association demanded that Aetna divest itself of Prudential operations in Houston if the deal goes through. An association spokesman said the TMA "has serious concerns about Aetna's market share if the merger goes through."