Aetna Inc. and CVS Health Corp. announced the $69 billion CVS agreement to acquire Aetna at what might have been the worst possible time for health insurance agents and brokers: as producers were racing to help older clients meet the Dec. 7 Medicare plan annual election period deadline.
Producers are also in the middle of helping employer clients with calendar-year plans nail down 2018 benefit plan enrollment, and, in some cases, doing whatever it is they still have the heart to do for consumers trying to get individual major medical enrollment period.
But Aetna has made some efforts to communicate with producers about the CVS deal.
Here’s a look at some of what the company has told producers, sifted from a blizzard of documents Aetna has filed with the U.S. Securities and Exchange Commission.
1. Aetna Chairman Mark Bertolini did actually mention brokers during a conference call Aetna and CVS held with securities analysts on Monday.
We, frankly, missed the mention the first time we listened to the call.
Justin Lake of Wolfe Research L.L.C. did ask about the possible effects of the deal on broker distribution, and about the possibility that Aetna might somehow sell coverage through CVS drug stores.
“I don’t think there’s any impact short term,” Bertolini said during the call, according to a transcript provided by Aetna. “And as a matter of fact, there’s an opportunity to start the store marketing with brokers as we look forward. So I think there’s a huge opportunity to capture more share over time as we go forward. I think the longer term is when you start having these convenience places, these new front doors for health care for Medicare, there’s great opportunity because it’s in the retention. I mean, our numbers show that there’s $2,500 more in lifetime value of the customer for each year you keep them. So, this idea of getting them on a project, engaging them in a program, having them find a store convenient to use, will allow us to keep more of those customers over time.”
2. Bertolini sent an email about the deal to agents and brokers on Sunday.
Here’s the text of the email.
To Our Valued Brokers,
As you may have seen in the news, CVS Health, the largest pharmacy health care provider in the U.S., has agreed to acquire Aetna. This has no immediate effect on the products your clients have purchased or the products you are selling today.
We are very excited about this combination. CVS Health and Aetna are joining to become the trusted front door to health care. Nearly 70% of the U.S. population lives within three miles of a CVS Health retail store and nearly five million Americans visit CVS Health every day. We will use CVS Health’s 9,700 retail locations to establish entirely new community health hubs dedicated to improving consumer wellbeing and answering questions about health, prescription drugs and health care benefits.
Our company will deliver care by utilizing CVS Health’s network of 1,100 in-store clinics, which are significantly less expensive than traditional health care delivery settings. Further integration of our pharmacy operations will help offset some of the projected increases in prescription drug prices, resulting in cost savings for employers and consumers.
We expect the transaction to close in the second half of 2018. We will keep you updated about any developments that may be of interest to you as the transaction progresses. In the meantime, we will continue to operate in all respects as independent companies. Should you have any questions, please do not hesitate to reach out to your Aetna representative. You can also visit www.Aetna.com for more information.
Thank you for your continued support.
Mark Bertolini, Chairman and CEO
(Photo: M. Spencer Green/AP)
3. Aetna created a script for use in conversations with brokers.
Here’s a copy of the script.
As you’ve probably seen in the news, CVS Health has agreed to acquire Aetna. I am really excited about what this means for consumer health care.
The news of this transaction will have no immediate effect on the products your clients have purchased and the products you are selling today.
CVS Health and Aetna are joining to become the trusted front door to health care. Nearly 70% of the U.S. population lives within three miles of a CVS Health retail pharmacy and nearly 5 million Americans visit CVS Health every day.
Together we plan to build an entirely new health care concept that will deliver a better experience, reduce costs and improve access to trusted health care experts in communities across the country.
CVS Health and Aetna are committed to utilizing CVS Health retail locations as community health hubs for Aetna members and other consumers. These hubs will provide a new health care solution dedicated to improving consumer wellbeing and answering questions about health, prescription drugs and health care benefits.
The transaction is expected to close in the second half of 2018, subject to regulatory and Aetna and CVS Health shareholder approvals and other customary closing conditions. We will communicate with you in a timely manner about any developments.
In the meantime, we will continue to operate in all respects as independent companies.
Should you have any questions, please do not hesitate to reach out to your Aetna representative.
4. CVS says it will keep the Aetna brand name.
Aetna addresses this question in a set of questions and answers aimed at vice presidents.
“CVS Health has committed to maintaining the Aetna brand in the marketplace in recognition of the exceptional value we provide to the people we serve,” Aetna says.
5. CVS is not making any promises about the new headquarters facility Aetna has been building in New York City, which is near Google’s New York office.
Here’s how Aetna answers that question in the Q&A document, and in several other, similar documents:
“All real-estate locations will be evaluated by CVS Health during the integration planning process,” Aetna says.
—Read Aetna to Move Headquarters to New York on ThinkAdvisor.