The Aetna-Humana Proposed Merger

Abstract

In 2015, numerous companies offered health insurance in the United States, but there were five clear leaders in terms of revenue: UnitedHealth Group, Anthem, Aetna, Cigna, and Humana. On July 3 of that year, Aetna announced an agreement to purchase Humana for $37 billion in a combination of cash and stock. A few weeks later, the second and fourth largest health insurers, Anthem and Cigna, announced their own proposed merger. Suddenly, it was possible that the five leading health insurers could merge into just three. In this chapter we discuss the economic analysis in the proposed Aetna-Humana merger.