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CA Department of Insurance

Insurance commissioner urges U.S. Justice Department to block merger of Aetna and Humana

News: 2016 Press Release

For Release: June 23, 2016
Media Calls Only: 916-492-3566
Email Inquiries: cdipress@insurance.ca.gov
Insurance commissioner urges U.S. Justice Department to block merger of Aetna and Humana
Merger is anti-competitive in California and across the U.S.

SACRAMENTO, Calif. – Citing an already highly concentrated health insurance market, reduced consumer choice, reduced quality, and increased prices, California Insurance Commissioner Dave Jones today issued his finding that the Aetna and Humana merger is anti-competitive. Jones formally recommended the United States Department of Justice block the proposed merger of Aetna and Humana.

Jones held a public hearing regarding the proposed merger in late April and heard testimony and received written comments from consumers, medical providers, anti-trust experts, and health insurance executives. As with other recently proposed mergers, Jones reached his findings and recommendation after he and the Department of Insurance conducted an in-depth review and analysis of the testimony, studies, and written comments.

Jones found that the Aetna and Humana merger would reduce competition in already heavily concentrated commercial health insurance markets in California and across the nation. Jones' findings also included the negative impact on the millions of seniors nationally who rely on Medicare Advantage. A merged Aetna-Humana would have 26 percent of all Advantage enrollees in the country, more than any other insurer.

"One thing we know for sure is consumers do not benefit when there are fewer choices due to a lack of competition," said Insurance Commissioner Dave Jones. "The Aetna and Humana merger has anti-competitive impacts that will likely result in increased prices, decreased availability of health insurance products, and decreased quality and access to healthcare."

The proposed Aetna-Humana merger would combine the third and fifth largest health insurers by market value, in a setting where the second and fourth largest health insurers by market value (Anthem and Cigna) are also seeking to merge. Jones concludes that the market concentration in California and in other markets resulting from the Aetna and Humana merger is damaging to access, quality, and affordability.

After more than a decade of unreasonable rate increases by health insurers, health insurance affordability is an ongoing issue in California. Aetna companies have implemented a total of seven unreasonable rate increases impacting nearly half a million Californians, at a cost of $40 million in recent years.

"Aetna has a track record of excessive rate increases on small businesses in California. The Aetna merger with Humana would permanently remove one of the nation's largest health insurers from the market and further reduce competition," Jones continued. "With regard to the Aetna/Humana merger, once again, bigger is not better for consumers, businesses, or health insurance markets."

Jones's findings and recommendation is contained in a detailed and comprehensive 24 page letter formally submitted today to the U. S. Department of Justice, which has an open investigation on the proposed merger.

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Media Notes:

  • Link to Aetna/Humana hearing documents: http://bit.ly/28ObYr2 
  • California also has the largest health insurance market in the United States. Health insurers and managed care plans collect $122.9 billion in premium annually from Californians.
  • Rate filing history:
    • October 2015, 27.4 percent increase affecting 40,000 lives
    • December 2014, 10.7 percent increase affecting 64,000 lives
    • April 2012, 30.3 percent increase over 24 months for small employers with Aetna's PPO health insurance policies
    • A July 2015 DMHC press release cited four unreasonable rate increase requests to that Department in just over two years, including:
      • July 2015, 21 percent increase affecting 13,000 lives
      • May 2015, 19.2 percent increase affecting 16,000 lives
      • December 2014, 17.3 percent increase affecting 9,500 lives
      • March 2013, 11.4 percent increase affecting 20,000 lives


The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $394 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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