Aetna Inc.’s $34.1 billion deal to buy Humana Inc., announced early Friday, marks the first combination following weeks of deal talks among the largest health insurers as they race to bulk up in a market reshaped by the federal health-care overhaul.
Aetna will pay $230.11 a share for its smaller rival, 54% in cash and the rest in Aetna shares. The tie-up would create the No. 2 health-insurance company by revenue, pairing Humana’s strong Medicare franchise with Aetna’s core business of selling coverage to employers.
The two chief executives said Friday changes stemming from the Affordable Care Act, which has pushed the industry toward individual coverage and new ways of paying providers, helped set the stage for their deal.
The health law was “an action-forcing event that has catalyzed a lot of very important discussions,” Aetna CEO Mark Bertolini said.
Humana CEO Bruce Broussard flagged changes in the health-care system that are often tied to the law, including an increasing focus on selling to individuals rather than employers. The law created health-insurance marketplaces where consumers can buy their own coverage, and provides federal subsidies to help lower-income people purchase plans. The result is millions of potential new customers, though reaching them has required insurers to pivot, offering more choices and lower-cost plans.
The law also helped prod a movement away from paying doctors and hospitals a fee for each service, and toward reimbursement methods meant to reward more-efficient care, another trend Mr. Broussard cited as a key driver of the deal.
“As the industry has transitioned through health care reform, we are seeing the needs of competing for the future—offering more choices, investing in technology, and the ability to have scale,” Mr. Broussard said.
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