California insurance chief opposes Humana-Aetna merger, but state agency with actual authority approves it after commitments

“Shares of Aetna and Humana plunged Thursday afternoon after the insurance commissioner of the country’s most populous state said he opposes the proposed merger of the two health insurance giants,” Boris Ladwig reports for Insider Louisville.

California Insurance Commissioner Dave Jones said in a conference call and a news release that the Justice Department should oppose the merger because it would reduce quality and consumer choices while increasing prices. “Shares of Humana dropped 1.6 percent, or more than $3, within two minutes after the announcement,” Ladwig reports. “Aetna’s shares fell about 0.5 percent within three minutes. Trading volume also spiked for both companies around the time of Jones’ statement.”

Aetna noted that Jones has no official authority over the merger, and the only California agency that does, the Department of Managed Health Care, approved it Monday. The agency said it had negotiated commitments, including almost $50 million in health-related expenditures, as part of the approval.