Trenton, NJ 08625-0360
August 6, 1999
Dennis McGowan, DHSS, 609-984-7160
Bill Heine, DOBI, 609-292-5064
TRENTON - Health and Senior Commissioner Christine Grant and Banking and Insurance Commissioner Jaynee LaVecchia today approved Aetna, Inc.'s purchase of Prudential Health Care Plan, Inc., subject to certain conditions placed on the ownership transfer to protect HMO consumers and health care providers.
In their decision, the commissioners found the acquisition met all applicable statutory and regulatory requirements. The commissioners noted that both the U.S. Justice Department and state Department of Law and Public Safety's Division of Criminal Justice concluded that there was insufficient basis to challenge this merger under antitrust laws.
"Through this decision and consent order we have balanced the business interests of Aetna and Prudential Health Care with the concerns expressed by consumers and providers throughout the application process," said Commissioner Grant.
"Throughout this process we were attentive to concerns regarding the effect this sale might have on HMO consumers and the health insurance market in this state," said Commissioner LaVecchia. "For that reason, we will be monitoring the transition to make sure there is no adverse impact on the future delivery of health care in New Jersey."
The conditions include consumer protection provisions, provider protections, restrictions on the use of certain contract provisions previously employed by Aetna, rate review and enhanced reporting and examinations requirements during the period of integration of the health plan.
Aetna will continue to operate its Aetna/U.S. Healthcare and PruCare health maintenance organizations separately, each maintaining its own benefits, networks and payment rates, until the departments review and approve a transition plan and until current PruCare contracts expire. Aetna's transition plan must be submitted within 90 days.
Among the conditions imposed on the ownership transfer, Aetna will continue coverage after PruCare contacts expire for an additional 120 days for members with life-threatening or disabling conditions with the patients' current provider even if the provider chooses not to join Aetna. Coverage with current providers for pregnant members will continue through six weeks after delivery.
Aetna also agrees to continue its current commitment to programs such as Medicare, Medicaid, KidCare and the Vaccines for Children.
Other conditions include:
After a public hearing and careful review, no sufficient basis was found to determine that this transaction should be disapproved for any of the five factors.
A consent order was signed by Aetna and Prudential with the department, under which the companies have agreed to abide by the conditions. A copy of the decision and consent order can be found at http://www.naic.org/nj/aetnarp2.htm.