Beleaguered health insurance giant Aetna is pulling out of the HMO market in Louisiana and transferring its HMO operations there to Coventry Health Care. Financial terms of the deal were not disclosed.
Bethesda, Md.-based Coventry will be given access to Aetna's 10,000 HMO members in the state.
Coventry's Louisiana plan has already grown 46% during the past 12 months to 60,000 members, the company said.
The agreement follows a similar deal in May when Coventry acquired Aetna's commercial HMO customers in the St. Louis market.
Aetna's decision to exit Louisiana followed an extensive study of the market. "We have determined that the Louisiana area is not a market where we can best serve our customers with an HMO product," Joseph Blanford, manager of the company's Southeastern region, said in a statement.
When current Aetna contracts come up for renewals, employers will be able to sign up with Coventry.
The first contracts expire at the end of the year.
State insurance regulators said Aetna customers could be forced to find new doctors, depending on which new plan employers choose.
Aetna's departure will reduce the number of HMOs in Louisiana to nine.
The Hartford, Conn.-based company will continue to offer its PPO, indemnity, dental, group life and disability products to customers in the state.
Aetna has been struggling during the past year with skyrocketing medical costs and sagging profits.
The insurer announced earlier this year that it expects to lose at least 10% of its total membership as it exits a number of unprofitable markets.