A new healthcare giant is here! CVS has closed a 69-billion merger with Aetna, the nation’s third-largest health insurer. The companies have recently announced that all necessary approvals had been obtained (New York was the last state to sign off on the deal).
Several states opposed the merger due to potential antitrust issues (federal regulatory approval was obtained in 2017). As a result, CVS agreed to some concessions. For example:
in California, CVS agreed not to raise premiums as a result of acquisition costs;
In New York, CVS promised enhanced consumer and health insurance rate protections, privacy controls, cybersecurity compliance, and a $40 million commitment to support health insurance education and enrollment.
To remind, CVS also operates one of the largest pharmacy benefits managers through CVS Caremark and a major Medicare Part D plan sponsor through its SilverScript. With the acquisition of Aetna, CVS becomes a major conglomerate in the healthcare arena.
As CVS announced last year, the merger is necessary to revolutionize healthcare: make it local and accessible, simplify access, and lower cost. To test the model, CVS plans to open additional stores offering healthcare services, such as primary care, management of chronic conditions, providing guidance to discharged hospital patients. The stores are to open in early 2019 in selected locations.