Princess Health and Aetna is close to a deal to buy Humana, Bloomberg reports.Princessiccia

Princess Health and Aetna is close to a deal to buy Humana, Bloomberg reports.Princessiccia

Affordable Care Act health insurance mergers obamacare

Gusty 12:00 Add Comment

Getty Images, via CNBC

Health insurer Aetna "is said to be closing in on a deal to buy" Louisville-based Humana Inc., Julie Hyman reports for Bloomberg News, "and a deal could come "as soon as this weekend."

Humana is also expecting an offer from Cigna Inc., but Humana's board of directors "prefers the Aetna offer," Hyman reports, citing unnamed people familiar with the negotiations. The deal has been discussed for weeks, but Aetna didn't make a formal proposal until this week.

The last major obstacle to a deal may have been the Supreme Court's ruling today that people in all states are entitled to tax subsidies for health insurance under the Patient Protection and Affordable Care Act, Hyman suggests, noting higher stock prices for health-insurance companies.

"Shares of Humana rallied more than 8 percent after trading was briefly halted for volatility," Reem Nasr of CNBC reports.

Humana is an attractive buy because "a great deal of its business � 73 percent of its premiums revenue � comes from contracts with the federal government," David Mann reports for Louisville Business First. "That means Humana is flush with Medicare business, which is a fast-growing category in the industry as many baby boomers are reaching the eligibility age. Its competitors, including Aetna, don't have nearly as much of this business."

"Consolidation among the country's top insurers follows a massive consolidation among providers in pharmacy, hospital and patient care, which has increased the leverage against insurers like Humana and Aetna," Grace Schneider reports for The Courier-Journal.

Princess Health and Merger mania: Aetna bids for Humana; Cigna may want it too; Anthem has bid for Cigna; UnitedHealth makes a play for Aetna.Princessiccia

Princess Health and Merger mania: Aetna bids for Humana; Cigna may want it too; Anthem has bid for Cigna; UnitedHealth makes a play for Aetna.Princessiccia

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Gusty 17:13 Add Comment

Aetna Inc. has made a bid to buy Louisville-based Humana Inc.,"one of a number of recent moves by big health insurers to find merger partners," Dana Mattioli and Liz Hoffman report for The Wall Street Journal.

The proposal was made in "the last few days," the Journal reports. "It isn�t clear how much Aetna indicated it would pay. Humana has a market value of $30 billion. The company hired Goldman Sachs Group Inc. to help it field takeover interest, people familiar with the matter have said."

Meanwhile, Aetna has been approached by another big insurer, UnitedHealth Group. "It isn�t clear what, if any, Aetna�s response was," the Journal reports. "News of the Aetna proposal comes the same day Anthem Inc., another of the five big managed-care companies, said it boosted its takeover offer for Cigna Corp.,"offering $47.5 billion. "Anthem went public with the bid after the two sides failed to reach agreement, and is seeking to put pressure on Cigna through Cigna shareholders."

"Cigna itself is eyeing Humana, people familiar with the matter have said. The five big managed-care companies are jockeying for deals that will enable them to get more efficient and better respond to changes in the health care landscape in the U.S.," the Journal reports.

"Humana, which has an estimated 12,000 employees and roughly 2,000 contractors in Louisville and the immediate region, has been seen as an attractive target in the health-insurance industry because of its well-run business running Medicare Advantage programs," Grace Schneider reports for The Courier-Journal. The company is valued at $30 billion.

"The company's membership rolls have surged to more than 3 million in the last year," Schneider writes. "That growth comes when health care reform has forced providers � hospitals, doctors, pharmacies, among them � to consolidate to increase their leverage and clout in an increasingly competitive health care segment. For the same reason, health insurers are now looking to consolidate."

Princess Health and University of Louisville delays choosing hospital partner.Princessiccia

Princess Health and University of Louisville delays choosing hospital partner.Princessiccia

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Gusty 11:20 Add Comment

To allow time for more "discussions and negotiations," the University of Louisville has put off deciding on University Hospital's new health-care partner until the end of June.

It is not known how many entities are interested in partnering with the indigent-care hospital, nor have any entities been identified. The deadline for applications, which was last month, has not been extended. "The university has said it needs a partner with deep pockets that can inject cash required to expand the hospital and attract new patients," reports Andrew Wolfson for The Courier-Journal.

Kerri Richardson, chief spokeswoman for Gov. Steve Beshear, said he is hopeful the hospital will find "a suitable path forward to preserve its public mission and continue to successfully serve citizens in the region."

Last year, Beshear rejected a proposed merger between University Hospital, Jewish Hospital & St. Mary's HealthCare and Saint Joseph Health System, which is owned by Catholic Health Initiatives. Because Saint Joseph would have had majority control in the initial deal, the other facilities would have had to adhere to Catholic health directives, which affect procedures like elective abortions, sterilizations, artificial insemination and euthanasia. Those limitations raised concerns and that the move would have been a loss of control of a public asset, meaning University Hospital.

After Beshear's decision, Jewish & St. Mary's and St. Joseph merged, forming KentuckyOne. (Read more)

Princess Health and Expect more hospital mergers across the country, some with unlikely partners, Moody's Investors Service report predicts.Princessiccia

Princess Health and Expect more hospital mergers across the country, some with unlikely partners, Moody's Investors Service report predicts.Princessiccia

hospitals mergers Patient Protection and Affordable Care Act

Gusty 12:34 Add Comment

Reflecting several hospital mergers that have already taken place in Kentucky, a new report from Moody's Investors Service predicts hospitals will continue to band together across the country as they respond to changes in health care.

"The difficult business environment and the changes expected in how hospitals will be paid for delivering care are driving many smaller, stand-alone hospital groups into the arms of larger and better-financed organizations," reports Reed Abelson for The New York Times.

Hospitals have long looked for partners to become larger in order to have more negotiating power to ask for higher payments from insurers. But now they are looking at ways to become more efficient too as they expect lower reimbursements from Medicare because of federal health-care reform. That means more consolidation, Moody's says.

While there are traditional mergers in play, there are also more atypical alliances forming. One of the nation's largest nonprofit hospital groups, North Shore-LIJ Health System, will join with Hackensack University Health Network in New Jersey, for example. There are instances of for-profit hospital groups joining with private equity firms. Health insurance companies could even become buyers, and hospitals and doctors could join forces "so they can be more of a one-stop shop," Abelson reports.

As a result, patients will ultimately have fewer hospitals from which to choose, but some small, stand-alone hospitals, especially in rural areas, will still exist. "We're not going to predict the small independent hospitals will all shutter and close," said Lisa Goldstein, one of the authors of the report. (Read more)