Aetna, one of the nation’s biggest health insurers, claimed a bigger stake in the burgeoning market for government-funded coverage Monday when it announced plans to buy a leading provider of Medicaid and Medicare coverage for $5.7 billion.
The Hartford, Conn., company’s proposed acquisition of insurer Coventry Health Care will bolster its Medicaid business a few months before millions of people are expected to become eligible for the state- and federally-funded program for the needy and disabled under President Barack Obama’s massive health care overhaul.
It also will boost the company’s portion of business from the federally-funded Medicare program, which covers seniors over age 65 and those who are disabled, at a time when interest in these plans is growing in part because the baby boomers are aging.
The deal underscores the major changes taking place in the health care industry as a result of the landmark overhaul. It marks the second time since the Supreme Court upheld the law in June that a big insurer has snapped up a smaller company focused on government coverage. Last month, WellPoint Inc., which offers Blue Cross-Blue Shield plans in 14 states, announced a $4.46-billion deal to buy Amerigroup Corp., and more acquisitions are likely.
Aetna is the nation’s third-largest health insurer based on enrollment, trailing only UnitedHealth Group Inc. and WellPoint.
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