California regulators approved the $69 billion CVS-Aetna merger with conditions on Thursday, bringing the deal another step closer to the finish line.
The state's Department of Managed Health Care said CVS and Aetna agreed to keep premium increases "to a minimum" after the merger, though the agency didn't define a threshold in its announcement. Like other commercial health insurers, Aetna will still be subject to rate reviews by the department.
Among other conditions, CVS and Aetna also agreed to not raise insurance premiums as a direct result of acquisition costs. And the companies agreed to invest $240 million into California's healthcare delivery system by improving buildings, supporting job growth and investing in value-based care.
"The department thoroughly examined this merger and determined enrollees will have continued access to appropriate healthcare services and also imposed conditions that will help increase access and quality of care, remove barriers to care and improve health outcomes," Shelley Rouillard, the department's director, said in a statement.
California's approval comes after the U.S. Justice Department said last month it would allow CVS and Aetna to merge with the condition that Aetna divest its stand-alone Medicare prescription drug plan business to WellCare Health Plans.
During a conference call with investors this month, CVS CEO Larry Merlo said the merger needed approval from just five more states, including California, and he expected to close the deal before Thanksgiving.