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Insurer Aetna to buy Humana in $35B deal

A sign for Aetna Inc., sits atop a

A sign for Aetna Inc., sits atop a building at the company headquarters in Hartford, Conn. on Tuesday, Aug. 19, 2014. Credit: AP / Jessica Hill

Officials say Aetna's proposed purchase of rival health insurer Humana can be seen as a positive opportunity for Louisville.

In a deal announced Friday, Aetna plans to spend about $35 billion to buy Louisville-based Humana and become the latest health insurer bulking up on government business as the industry adjusts to the federal health care overhaul.

According to The Courier-Journal (http://cjky.it/1GVakeI), CEOs of both companies said the company's presence in Louisville will be more robust, growing from $50 billion today to $60 billion under the arrangement.

The newspaper reports Louisville will be the headquarters of the combined company's government businesses of Medicare, Medicaid and TRICARE, which the CEOs said make up about 56 percent of the combined company's projected 2015 operating revenue of about $115 billion. Those segments are also among the fastest-growing in the insurance business.

"I think it's very fair to speculate that it will lead to more jobs," Mayor Greg Fischer said of the deal.

Bruce Broussard, president and CEO of Humana, said he thinks Louisville will be a "net beneficiary as a result of this transaction."

Broussard and Aetna chairman and CEO Mark Bertolini said they carefully considered the deal's effect on Louisville, where Humana was founded more than 50 years ago. For example, they said the philanthropic Humana Foundation will remain a separate entity and continue its work in the community.

"I can assure you that the presence (in Louisville) will be more robust than ever," Bertolini said. But he added that it's "way too early" to talk about exactly how the new arrangement will affect specific jobs and departments.

Fischer said it's too soon to speculate on what jobs may be lost or added as part of the deal, which will face government scrutiny and votes from shareholders of each company. Aetna, which is based in Hartford, Conn., said it would be transferring some jobs to Louisville.

"Louisville has a depth of human talent in this important business sector and we will demonstrate that depth to the new owners. We will be fighting to grow Humana-Aetna's presence in Louisville," Fischer said.

Humana is among the city's largest employers with approximately 12,500 workers and roughly 1,500 contractors. It also is a supporter of the arts and philanthropic groups.

In four decades after its founding, Humana and its foundation has donated more than an estimated $150 million to education and the arts, including the annual New American Plays festival at Actor's Theater, the Kentucky Opera, the orchestra, Fund for the Arts and the Kentucky Center for the Arts.

Metro United Way received a total of $25.7 million over the last 20 years, said Joe Tolan, president and CEO at Metro United Way.

"For over 50 years, Humana has been an incredibly important part of our local community," Tolan said. The company "and its employees play so many significant roles, and our entire community benefits every day," he said.

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