Sierra Health Services and Humana are the leading candidates to buy Aetna's managed-care plans in Dallas-Fort Worth and Houston. Aetna must sell the plans to complete its proposed $1 billion purchase of Prudential HealthCare, state regulators said.
In a development that could throw off a quick timetable for closing the Aetna-Prudential deal, the American Medical Association and the Medical Society of New Jersey last week asked New Jersey Attorney General John Farmer Jr. to review the sale. The deal could constitute an illegal monopoly under state law, the groups said. Data from the New Jersey Department of Business and Insurance show the deal would consolidate 43.3% of the HMO and point-of-service markets statewide, with concentrations exceeding 50% in five counties.
As that complication plays out, Mark Hanna, a spokesman for the Texas Department of Insurance, said Las Vegas-based Sierra and Louisville, Ky.-based Humana are the only health plans to have approached the department about Aetna's Texas plans, which have 427,000 enrollees combined. But the potential suitors downplayed their interest.
Ross McLerran, a Humana spokesman in San Antonio, said Humana doesn't comment on rumored acquisitions. Sierra is "taking a close look" at the Aetna plans but is not in negotiations, said spokeswoman Jenny DesVaux Oakes.
Last month, the U.S. Justice Department approved Aetna's purchase of 6.6 million-enrollee Prudential (June 28, p. 18), but said Aetna would have to sell some existing plans in Dallas-Fort Worth and Houston to avoid its having too much control of the managed-care market in those areas. Aetna had no comment last week about potential buyers.
Last December, Hartford, Conn.-based Aetna agreed to buy Prudential HealthCare, the managed-care business of Prudential Insurance Co., and combine it with Aetna's own managed-care company, Aetna U.S. Healthcare. The combined enrollment of the two managed-care companies would be more than 21 million nationwide, making it the country's largest managed-care company.
Aetna officials expected the sale to close as early as next month. That was before the AMA and New Jersey medical society sent a letter to New Jersey's attorney general questioning the sale and proposing several options, from blocking the merger to requiring Aetna to spin off some of its businesses in the state.
-With Mary Chris Jaklevic