Reuters, August 20, 2012

Insurer Aetna Inc said it will buy rival Coventry Health Care Inc for $5.6 billion in cash and stock to boost its share of government business and benefit from U.S. healthcare reforms. The U.S. healthcare reform aims to provide coverage for 16 million more Americans through privately run health insurance exchanges in each state, and will expand Medicaid eligibility for an additional 16 million people by raising limits on household income. The acquisition of Coventry will help Aetna lift its share of revenue from its government business to over 30 percent from 23 percent. It will help Aetna add nearly 4 million medical members and 1.5 million Medicare Part D members.

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