After weeks of intense discussions on possible mergers among the five biggest U.S. health insurers, Aetna announced it would buy Humana in a deal valued at $37 billion -- the largest insurance industry deal to date.
In an interview with FOX Business Network’s Charles Payne, Aetna Chairman and CEO Mark Bertolini (who will be CEO of the combined company) and Humana President and CEO Bruce Broussard said that the Affordable Care Act was behind the behemoth merger.
“[The Affordable Care Act] was an action-forcing event that is starting to create a marketplace where the consumer has a lot more say in what they purchase from insurance companies,” said Bertolini.
Bertolino says the deal was driven by a change in the relationship between insurance companies and providers.
“It’s no longer about how much I pay you for each service -- it’s more about how do we create a partnership where you get rewarded for improving the health of the population -- and we provide the backstop from a financing standpoint. So it’s a very different relationship than we had in the past. And that requires a local market presence, much more scale and a greater opportunity to invest capital into those kinds of relationships in the long term,” he said.
Broussard argues – despite upcoming steep premium hikes -- the Affordable Care Act has created a good opportunity for the consumer and insurers.
“One of the things that has happened with the ACA is that there is a regulatory aspect that regulates insurance pricing and that has created a great opportunity for the consumer both from the point of view of being protected on the pricing, but at the same time while creating competition in the local marketplace,” said Humana President and CEO Bruce Broussard.