Aug
02 2016
Dateline
City:
HARTFORD,
Conn. & LOUISVILLE, Ky.
— Divestitures Designed to Preserve Robust
Competition for Seniors Choosing to Receive Medicare Coverage Through Medicare
Advantage Plans —
— Transactions Contingent on Successful
Closing of Aetna-Humana Transaction —
HARTFORD, Conn. & LOUISVILLE, Ky.–(BUSINESS WIRE)–Aetna
(NYSE:AET) and Humana Inc. (NYSE:HUM) today announced they have entered into separate
agreements to sell certain of their respective Medicare Advantage assets to
Molina Healthcare, Inc. (NYSE: MOH) for a total estimated $117 million in cash
for both transactions, based on the estimated number of members in the plans
involved in the transactions. The transactions are subject to the successful
completion of Aetna’s proposed acquisition of Humana, CMS approvals and
actions, and customary closing conditions, including state and other regulatory
approvals.
As a result of the transactions, Molina is
expected to gain approximately 290,000 Medicare Advantage members in 21 states,
preserving robust competition for seniors choosing to receive Medicare coverage
through Medicare Advantage plans and addressing a key concern of the U.S.
Department of Justice in its challenge to the Aetna-Humana transaction.
“Our agreements with Molina promote
competition within the large, diverse and highly regulated Medicare industry,
and ensure that seniors continue to have an abundance of options when they
decide how to receive Medicare coverage,” said Mark T. Bertolini, Aetna
chairman and CEO, and Bruce Broussard, Humana president and CEO. “We believe
that these divestitures taken together would address the Department of Justice’s
perceived competitive concerns regarding Medicare Advantage. We are confident
in Molina’s ability to deliver continued access to quality care for our members
in these areas.”
On the Aetna-Humana combination, Bertolini
and Broussard commented, “We look forward to making our position clear in
court, where the facts will show that our combination will result in a broader
choice of products, access to higher quality and more affordable care, and a
better overall experience for consumers.”
The Medicare Advantage plans involved in
the transactions include certain Aetna Medicare Advantage plans in
Alabama, Arkansas, Florida, Georgia, Illinois, Louisiana, North Carolina,
Nevada, Ohio, Oklahoma, Texas, Virginia and West Virginia, and certain Humana
plans in Delaware, Illinois, Iowa, Kansas, Missouri, Nebraska, Ohio,
Pennsylvania, South Dakota and Utah. Aetna and Humana expect to continue
administering their respective plans involved in the transaction for a
transition period following the closing to provide consistency for Medicare
beneficiaries involved.
The companies remain committed to
vigorously defending their pending transaction against a U.S. Department of
Justice lawsuit seeking to block it. Aetna and Humana remain confident that
their transaction is in the best interest of consumers, particularly seniors
who elect to seek Medicare coverage through affordable, high-quality Medicare
Advantage plans.
For more information on the competitive
dynamics of traditional Medicare and Medicare Advantage, visit http://www.aetnaandhumana.com/wp-content/uploads/2016/07/Medicare_MA_Competitive7.21.16.pdf
For more information on the overall
benefits of a combined Aetna-Humana, visit http://www.aetnaandhumana.com/why-were-combining/building-a-healthier-world/.
About Aetna
Aetna is one of the nation’s leading
diversified health care benefits companies, serving an estimated 46.5 million
people with information and resources to help them make better informed
decisions about their health care. Aetna offers a broad range of traditional,
voluntary and consumer-directed health insurance products and related services,
including medical, pharmacy, dental, behavioral health, group life and
disability plans, and medical management capabilities, Medicaid health care
management services, workers’ compensation administrative services and health
information technology products and services. Aetna’s customers include
employer groups, individuals, college students, part-time and hourly workers,
health plans, health care providers, governmental units, government-sponsored
plans, labor groups and expatriates. For more information, see www.aetna.com and learn about how
Aetna is helping to build a healthier world. @AetnaNews
About Humana
Humana Inc., headquartered in Louisville,
Ky., is a leading health and well-being company focused on making it easy for
people to achieve their best health with clinical excellence through
coordinated care. The company’s strategy integrates care delivery, the member
experience, and clinical and consumer insights to encourage engagement,
behavior change, proactive clinical outreach and wellness for the millions of
people we serve across the country.
Cautionary Statement Regarding
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
You can generally identify forward-looking statements by the use of
forward-looking terminology such as “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “explore,” “evaluate,” “intend,” “may,” “might,”
“plan,” “potential,” “predict,” “project,” “seek,” “should,” or “will,” or the
negative thereof or other variations thereon or comparable terminology. These
forward-looking statements are only predictions and involve known and unknown
risks and uncertainties, many of which are beyond Aetna’s and Humana’s control.
Statements in this press release regarding
Aetna and Humana that are forward-looking, including the number of members
subject to the divestiture transactions; the impact of the Humana Acquisition
and/or the divestiture transactions on competition, the ability of the
divestiture transactions to address Department of Justice concerns, the quality
of Molina’s future services to Aetna and/or Humana members, the resolution of
the Department of Justice litigation relating to the Humana Acquisition, and
the duration of administrative services provided by Aetna and/or Humana to
Molina, are based on management’s estimates, assumptions and projections, and
are subject to significant uncertainties and other factors, many of which are
beyond Aetna’s and Humana’s control. Important risk factors could cause actual
future results and other future events to differ materially from those
currently estimated by management, including, but not limited to: the timing to
consummate Aetna’s proposed acquisition of Humana (the “Humana Acquisition”);
the timing and resolution of the Department of Justice litigation relating to
the Humana Acquisition; the timing to consummate the proposed divestitures of
certain of Aetna’s and Humana’s Medicare Advantage assets (collectively, the
“Divestitures”); the risk that a condition to closing of the Humana Acquisition
and/or the Divestitures may not be satisfied; the risk that a regulatory
approval that may be required for the Humana Acquisition and/or the
Divestitures is delayed, is not obtained or is obtained subject to conditions
that are not anticipated; the outcome of various litigation matters related to
the Humana Acquisition; Aetna’s ability to achieve the synergies and value
creation projected to be realized following the completion of the Humana
Acquisition; Aetna’s ability to promptly and effectively integrate Humana’s
businesses; the diversion of management time on Humana Acquisition-related
and/or Divestiture-related issues; the profitability of Aetna’s and Humana’s
public health insurance exchange and ACA compliant small group products, where
membership has had and may continue to have more adverse health status and/or higher
medical benefit utilization than Aetna and/or Humana projected; unanticipated
increases in medical costs (including increased intensity or medical
utilization as a result of flu or otherwise; changes in membership mix to
higher cost or lower-premium products or membership adverse selection; medical
cost increases resulting from unfavorable changes in contracting or
re-contracting with providers (including as a result of provider consolidation
and/or integration); and increased pharmacy costs (including in Aetna’s and/or
Humana’s public health insurance exchange products)); uncertainty related to
Aetna’s and Humana’s accruals for health care reform’s reinsurance, risk
adjustment and risk corridor programs (“3R’s”); uncertainty related to the
funding for and final reconciliations with respect to health care reform’s risk
management and subsidy programs; the implementation of health care reform
legislation, including collection of health care reform fees, assessments and
taxes through increased premiums; adverse legislative, regulatory and/or
judicial changes to or interpretations of existing health care reform
legislation and/or regulations (including those relating to minimum medical
loss ratio (“MLR”) rebates); the implementation of health insurance exchanges;
Aetna’s and Humana’s ability to offset Medicare Advantage and PDP rate
pressures; and changes in Aetna’s and Humana’s future cash requirements,
capital requirements, results of operations, financial condition and/or cash
flows. Health care reform will continue to significantly impact Aetna’s
business operations and financial results, including Aetna’s pricing and
medical benefit ratios. Key components of the legislation will continue to be
phased in through 2020, and Aetna will be required to dedicate material
resources and incur material expenses during 2016 to implement health care
reform. Significant parts of the legislation, including aspects of public
health insurance exchanges, nondiscrimination requirements, reinsurance, risk
corridor and risk adjustment, continue to evolve through the promulgation of
regulations and guidance at the federal level. In addition, pending efforts in
the U.S. Congress to amend or restrict funding for various aspects of health
care reform and pending litigation challenging aspects of the law continue to
create additional uncertainty about the ultimate impact of health care reform.
As a result, many of the impacts of health care reform will not be known for
the next several years. Other important risk factors include: adverse changes
in health care reform and/or other federal or state government policies or
regulations as a result of health care reform or otherwise (including
legislative, judicial or regulatory measures that would affect Aetna’s and/or
Humana’s business model, restrict funding for or amend various aspects of
health care reform, limit Aetna’s and/or Humana’s ability to price for the risk
it assumes and/or reflect reasonable costs or profits in its pricing, such as
mandated minimum medical benefit ratios, or eliminate or reduce ERISA
pre-emption of state laws (increasing Aetna’s and/or Humana’s potential
litigation exposure)); adverse and less predictable economic conditions in the
U.S. and abroad (including unanticipated levels of, or increases in the rate of,
unemployment); reputational or financial issues arising from Aetna’s and/or
Humana’s social media activities, data security breaches, other cybersecurity
risks or other causes; Aetna’s ability to diversify Aetna’s sources of revenue
and earnings (including by developing, operating and expanding Aetna’s consumer
business and expanding Aetna’s foreign operations), transform Aetna’s business
model, develop new products and optimize Aetna’s business platforms; the
success of Aetna’s Healthagen® (including Accountable Care Solutions and health
information technology) initiatives; adverse changes in size, product or
geographic mix or medical cost experience of membership; managing executive
succession and key talent retention, recruitment and development; failure to
achieve and/or delays in achieving desired rate increases and/or profitable
membership growth due to regulatory review or other regulatory restrictions,
the difficult economy and/or significant competition, especially in key
geographic areas where membership is concentrated, including successful
protests of business awarded to Aetna and/or Humana; failure to adequately
implement health care reform; the outcome of various litigation and regulatory
matters, including audits, challenges to Aetna’s and/or Humana’s minimum MLR
rebate methodology and/or reports, guaranty fund assessments, intellectual
property litigation and litigation concerning, and ongoing reviews by various
regulatory authorities of, certain of Aetna’s and/or Humana’s payment practices
with respect to out-of-network providers, other providers and/or life insurance
policies; Aetna’s ability to integrate, simplify, and enhance Aetna’s existing
products, processes and information technology systems and platforms to keep
pace with changing customer and regulatory needs; Aetna’s ability to
successfully integrate Aetna’s businesses (including Humana, Coventry, bswift
LLC and other businesses Aetna may acquire in the future) and implement
multiple strategic and operational initiatives (including the Divestitures)
simultaneously; Aetna’s and/or Humana’s ability to manage health care and other
benefit costs; adverse program, pricing, funding or audit actions by federal or
state government payors, including as a result of sequestration and/or curtailment
or elimination of the Centers for Medicare & Medicaid Services’ star rating
bonus payments; Aetna’s ability to reduce administrative expenses while
maintaining targeted levels of service and operating performance; failure by a
service provider to meet its obligations to Aetna or Humana; Aetna’s and
Humana’s ability to develop and maintain relationships (including collaborative
risk-sharing agreements) with providers while taking actions to reduce medical
costs and/or expand the services each company offers; Aetna’s ability to
demonstrate that Aetna’s products and processes lead to access to quality
affordable care by Aetna’s members; Aetna’s and/or Humana’s ability to maintain
their relationships with third-party brokers, consultants and agents who sell their
products; increases in medical costs or Group Insurance claims resulting from
any epidemics, acts of terrorism or other extreme events; changes in medical
cost estimates due to the necessary extensive judgment that is used in the
medical cost estimation process, the considerable variability inherent in such
estimates, and the sensitivity of such estimates to changes in medical claims
payment patterns and changes in medical cost trends; a downgrade in Aetna’s
financial ratings; and adverse impacts from any failure to raise the U.S.
Federal government’s debt ceiling or any sustained U.S. Federal government shut
down. For more discussion of important risk factors that may materially affect
Aetna, please see the risk factors contained in Aetna’s 2015 Annual Report on
Form 10-K (“Aetna’s 2015 Annual Report”) and Aetna’s Quarterly Report on Form
10-Q for the quarter ended March 31, 2016 (“Aetna’s March 2016 Quarterly
Report”), each on file with the Securities and Exchange Commission (“SEC”), and
Aetna’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016
(“Aetna’s June 2016 Quarterly Report”), when filed with the SEC. For more
discussion of important risk factors that may materially affect Humana, please
see the risk factors contained in Humana’s 2015 Annual Report on Form 10-K
(“Humana’s 2015 Annual Report”) and Humana’s Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K filed or furnished during 2016, each on file with
the SEC. You should also read Aetna’s 2015 Annual Report and Aetna’s March 2016
Quarterly Report, each on file with the SEC, and Aetna’s June 2016 Quarterly
Report, when filed with the SEC, for a discussion of Aetna’s historical results
of operations and financial condition. You should also read Humana’s 2015
Annual Report, Humana’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2016, each on file with the SEC, and Humana’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2016, when filed with the SEC, for a
discussion of Humana’s historical results of operations and financial
condition.
No assurances can be given that any of the
events anticipated by the forward-looking statements will transpire or occur,
or if any of them do occur, what impact they will have on the results of
operations, financial condition or cash flows of Aetna or Humana. Neither Aetna
nor Humana assumes any duty to update or revise forward-looking statements,
whether as a result of new information, future events or otherwise, as of any
future date.
Language:
English
Contact:
Aetna Media Contact:
T.J. Crawford, 212-457-0583
crawfordt2@aetna.com
or
Aetna Investor Contact:
Joe Krocheski, 860-273-0896
krocheskij@aetna.com
or
Humana Media Contact:
Tom Noland, 502-580-3674
tnoland@humana.com
or
Humana Investor Contact:
Regina Nethery, 502-580-3644
rnethery@humana.com
T.J. Crawford, 212-457-0583
crawfordt2@aetna.com
or
Aetna Investor Contact:
Joe Krocheski, 860-273-0896
krocheskij@aetna.com
or
Humana Media Contact:
Tom Noland, 502-580-3674
tnoland@humana.com
or
Humana Investor Contact:
Regina Nethery, 502-580-3644
rnethery@humana.com
No comments:
Post a Comment