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How does Aetna-Humana merger affect Philly?

This landmark agreement will combine Humana’s substantial Medicare Advantage business, approximately 2.8 million members, with Aetna’s already diverse commercial health insurance portfolio.

Once the acquisition is finalized, Aetna will have over 6 million senior adult members, and they are hopeful that it will establish them as the company that serves the most people enrolled in the federal government’s Medicare Advantage program.

Nationally, this merger is a big deal, with Aetna now having 33 million total members and becoming the second-largest managed care company in the US behind Kaiser Permanente. However, the impact on Philadelphia’s managed care marketplace will, in all likelihood, be insignificant.

Prior to the merger, Aetna was ranked third in the southeastern Pennsylvania Medicare market behind Keystone Health Plan East and Bravo Health, which have 86,432 and 56,883 members, respectively. Aetna only has 34,092. 

Across the bridge, in South Jersey, Aetna was already leading in Medicare Advantage enrollment, with 16,000 members in Camden, Burlington and Gloucester counties. Humana only had 46 members in these three counties.

Locally, Aetna was already the second largest overall health insurer behind Independence Blue Cross in the five-county Philadelphia region, and with this deal they will only pick up around 8,000 Humana Medicare members.

While these new members aren’t likely to have any affect on the region’s rankings, companies competing in the local Medicare Advantage market do have significant opportunity for growth.

According to data from the Center for Medicare and Medicaid Services, market penetration in the Philadelphia region is just 33%. So, out of the total Medicare eligible population of 694,00, only 231,452 people are enrolled in a plan.

This means that companies like Aetna have a chance to cash in big if they can find a way to infiltrate this open market, and their acquisition of Humana shows that they are undoubtedly trying to do just that.

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