Justice Dept. places conditions on Medicare Advantage deal

Posted April 9, 2012

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Humana will have to sell off part of its business if it wants to buy the Medicare Advantage plan Arcadian Management Services, the Dept. of Justice’s antitrust division announced March 27.

The conditions are meant to keep Humana from gaining near-total control of certain Medicare Advantage markets through its purchase of Arcadian, an Oakland, Calif.-based health plan with about 63,000 members. Humana, headquartered in Louisville, Ky., has 1.6 million Medicare Advantage members.

The department will require Humana and Arcadian to divest business in 51 counties and parishes in Arizona, Arkansas, Louisiana, Oklahoma and Texas in order for Humana to take over Arcadian. The divested business must be sold to a set of approved competitors.

After the divestiture, Humana will gain a net 50,000 members, Humana spokesman Jim Turner said.

The combined plan would have held between 40% and 100% of the Medicare Advantage market in the counties in question, according to the Justice Dept.The agency sued to block the acquisition and proposed a settlement outlining the divestitures.

“The transaction, as originally proposed, would likely have resulted in higher prices, fewer choices and lower-quality Medicare Advantage plans purchased by Medicare beneficiaries,” according to the department.

The settlement is pending court approval.

Note: This item originally appeared at

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