The four major health insurers currently pushing for mergers — Aetna and Humana, and Anthem and Cigna — are still a long way from gaining federal approval. But they say they're optimistic their respective deals will close by year-end, in part because they have had success getting the nod from state regulators.
On Monday, Florida became the 10th state to approve Aetna's $34 billion takeover of Humana. The state's insurance regulators did not require any divestitures — in a state that is a major market for Humana's Medicare business — but as a condition of approval, the merged company will have to expand its Obamacare exchange coverage in the state.
Aetna said it was pleased with the decision, and that it now has half of the necessary state approvals it needs. Still, the company has cautioned investors that the Department of Justice could impose stricter requirements for federal approval.
"The DOJ conversations are not even yet started on the divestiture front," Aetna CEO Marc Bertolini said on the company's fourth quarter conference call earlier this month. "We're still sharing data and working on the framework of the discussions."
So far, Anthem's $54 billion acquisition of Cigna has been approved by four states — Alabama, Tennessee, Nevada and Montana — according to a company spokesperson. Twenty-two other states are still reviewing the deal, along with federal regulators.
"I would characterize things as proceeding just as we might have expected. But, keep in mind, we've got a long way to go," said Cigna CFO Thomas McCarthy during an appearance at the Leerink Health Care conference in New York last week.
According to a transcript of the session, McCarthy said he couldn't offer much insight into discussions with the DOJ.
"Our assessment of, 'gee, what's the body language? '… is a very unreliable predictor. So, it really wouldn't be helpful to share that," he said. "We're comfortable with the resources we've brought to bear to respond to the DOJ request."
Still, the deals are not yet a sure thing.