The New York Department of Financial Services approved Aetna's proposed $37 billion acquisition of Humana on the condition that the companies continue offering Medicare Advantage plans in the state, sources said.
The Children's Hospital of Philadelphia has sealed an accountable care organization deal with Aetna to offer coordinated care to pediatric patients in Burlington County, N.J., and the five counties in the Philadelphia area. The deal, which is Aetna's first pediatric ACO, supports the insurer's efforts to transition to a value-based payment model.
Aetna's offer to buy Humana would expand Aetna's product portfolio from primarily commercial insurance plans to include Medicare managed care plans. Medicare and Medicaid are expected to grow, driven by the Affordable Care Act and a surge in retiring baby boomers.
Aetna said it will acquire its smaller competitor Humana for $37 billion in cash and stock, the insurance industry's biggest deal ever. The acquisition would almost triple Aetna's Medicare Advantage business. Many health care mergers and acquisitions have been delayed as the industry awaited last week's Supreme Court ruling on the U.S. health care law, analysts said.
CVS Caremark will administer $9.5 billion in annual drug spending for Aetna through its pharmacy network, the companies say. The 12-year contract could cut prescription-drug costs for 10 million members, officials say. Aetna's mail-order pharmacy business also will be handled by CVS.