NH Insurance Department Approves Healthcare Merger

The New Hampshire Insurance Department in Concord approved the proposed merger between health insurance companies Aetna and Humana in the state.

In July of last year, Aetna acquired Humana for a combination of cash and stock valued at $37 billion, or approximately $230 per Humana share. Both companies sell Medicare coverage in NH, primarily Medicare Part D prescription drug plans and Medicare Advantage plans.

A review by the Insurance Department showed that Aetna and Humana together hold 20.4 percent of the market share for Part D plans and 37.8 percent of the market share for Medicare Advantage plans. Because the companies collectively have a greater than 12 percent share in each of these markets, the Department was required by state law to scrutinize the transaction more closely, in what is known as a Form E review.

The Insurance Department’s review found that while the companies’ combined market shares exceed the state threshold in both markets, there would be no “anti-competitive effect” from a merger. Eighteen companies offer Medicare Part D plans in New Hampshire, so that market is not highly concentrated.

“In sum, the merger would not have the requisite anti-competitive effect as to Medicare Part D,” says the Insurance Department.

The Medicare Advantage market is highly concentrated, with just nine companies offering plans in the state. However, the Insurance Department found that Aetna and Humana are not direct competitors in this market. 

“Aetna ceased writing new business in this line in New Hampshire in 2015,” says the Insurance Department. “Humana companies mainly write Medicare Advantage in New Hampshire, and Aetna no longer markets Medicare Advantage here.”

Because of these circumstances, the Insurance Department says that “as to Medicare Advantage, there is also a lack of anti-competitive effect.”

The Insurance Department’s full report may be found here.