Deal critics and backers are debating with divestitures can do enough to address the critics' market concentration concerns. (Image: Thinkstock)

(Bloomberg) — Aetna and Humana said they have a provisional agreement to sell some of their assets to rival Molina Healthcare in an effort to get federal antitrust regulators to approve their $37 billion merger.

The transactions are subject to the successful completion of Aetna’s acquisition of Humana, as well as other regulatory approvals. Long Beach, California-based Molina would pay $117 million in cash in the two deals, gaining private Medicare plans that cover about 290,000 people in 21 states, Aetna and Humana said Tuesday in a statement.

Related: Aetna ready to fight for $37 billion Humana deal in court

The Justice Department, which sued last month to block Aetna from buying Humana along with Anthem’s purchase of Cigna Corp., has been skeptical that divestitures can maintain competition in the health insurance market. The two deals would consolidate the five biggest U.S. health insurers into three companies, and the United States has said the tie-ups would raise costs and diminish choices for consumers.

“We believe that these divestitures taken together would address the Department of Justice’s perceived competition concerns regarding Medicare Advantage,” Aetna and Humana said in the statement.

Mark Abueg, a Justice Department spokesman, declined to comment.

ACA exchange plans

Aetna shares rose 1.4 percent to $116 in early trading before U.S. markets opened.

Separately, Aetna said it’s reevaluating its sales of health plans on the Affordable Care Act’s exchanges next year. The company won’t add more states to the 15 where it currently offers coverage, and may withdraw from some markets, according to a statement. Last week, Humana said it was broadly retreating from sales of plans to individuals under the health law, which is also known as Obamacare.

Aetna also reported second-quarter profit that beat analysts’ estimates as the health insurer cut the proportion of revenue spent on operations. Earnings excluding certain items were $2.21 a share, Hartford, Connecticut-based Aetna said in the statement. Analysts had estimated $2.12 a share on average.

Non-medical spending

Non-medical spending came in below estimates, helping Aetna’s adjusted profit exceed expectations even as medical spending was higher than projected, Ana Gupte, an analyst at Leerink Partners, said in a note to clients. Non-medical expenses accounted for 17.4 percent of revenue, down from 18.4 percent a year earlier.

Medical spending climbed, driven by higher costs to care for members buying plans under the ACA, Aetna said. The company spent 82.4 cents of every premium dollar on medical costs in the second quarter, compared with spending 81.1 cents a year earlier.

Other highlights from Aetna’s second-quarter results:

Net income rose to $790.8 million, or $2.23 a share, from $731.8 million, or $2.08 a share, a year earlier. Revenue increased 4.7 percent to $16 billion. Medical membership was steady from three months earlier at about 23 million people, Aetna said.

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