Lawmakers concerned about Kentucky jobs in proposed Aetna-Humana merger
08/25/2015 08:16 PM
FRANKFORT – The multi-billion dollar proposed merger of healthcare giants Humana and Aetna has Kentucky lawmakers asking questions about a major Kentucky employer.
Members of the Interim Joint Committee on Banking and Insurance heard from insurance provider Aetna on Tuesday as the company moves forward with the merger which is under review by antitrust regulators.
The companies announced on July 3 that Aetna, based out of Connecticut would buy Louisville based Humana for $37 billion.
The new company would have more than 33 million members, and bring in estimated revenue of about $115 billion per year, with 56 percent coming from government-sponsored programs such as Medicare.
Fran Soistman, Executive Vice-President of Government Affairs for Aetna assured Kentucky lawmakers on Tuesday that his company understands Humana’s significance to Kentucky.
“Once the transaction is approved, Humana’s Louisville offices will become the headquarters for the companies newly combined government businesses including Medicare, Medicaid and Tricare,” Soistman said.
Committee Co-Chair Rep. Jeff Greer, D-Brandenburg, wanted assurances from Soistman that Aetna will be committed to Kentucky after the merger takes place.
“There is great respect for the history of Humana in Kentucky,” Soistman said. “They’re one in the same. Our chairman made that very clear from the beginning.”
Greer also questioned Soistman about whether the number of jobs will decrease, increase, or stay the same as a result of the merger.
Soistman responded with no specifics saying that it’s too early in the process, but he said that Aetna looks at Humana’s current 13,000 Kentucky employees as the minimum number of employees that his company would have in the commonwealth post-merger.
“That’s our starting point and we’d like to see that number grow,” Soistman said. “These are growth businesses. Frankly there’s no reason why they can’t grow.”
Sharon Clark, the commissioner of the Department of Insurance, told committee members that her department has already contracted with two PhD economists who specialize in health insurance mergers and market shares who will assist in an analysis of the proposed merger.
“We will be looking at every line of business that each of the companies do,” Clark said. “We will be looking at that on a regional basis to determine if it creates at monopoly situation or an anti-competitive nature.”
If approved, it would be the largest-ever merger in the health insurance industry.
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