Kansas approves Aetna purchase of Coventry

Insurance Commissioner Sandy Praeger gives OK to deal

1 | Insurance

— Kansas Insurance Commissioner Sandy Praeger today approved the sale of Coventry Health Care of Kansas to health insurance giant Aetna.

Praeger had signaled that she would likely approve the $7.3 billion acquisition following a sparsely-attended public hearing earlier this month.

Aetna is the nation’s fourth largest health insurer. It covers more than 18 million Americans and generates annual revenues of more than $33 billion. In its third quarter earnings report, Aetna said the acquisition of Coventry, the nation’s seventh largest health insurer, would increase its number of insured by 4 million and boost its Medicare prescription drug plan members by 1.5 million.

In 2011, Aetna collected just under $58 million in Kansas premiums while Coventry took in $187 million.

Coventry’s strong presence in Kansas is largely the result of its 2010 acquisition of Wichita-based Preferred Health Systems.

Kansas is among more than 20 states where Aetna needs approval of regulators to make the acquisition.

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istamm (Ira Stamm)November 15, 2012 at 9:13 a.m.

The acquisition of Coventry by Aetna will accelerate the consolidation of the health insurance industry into several mega-companies. Within five years most Americans are likely to be insured either by a publicly funded plan such as Medicare, Medicaid, Champus/Tricare, etc., or one of three to five private insurance companies. There will be less free market competition and fewer choices for Kansans. Paradoxically, the private marketplace is pushing Kansas in the direction of a single or dual payor private plan(s).

Ira Stamm