The Office of the Insurance Commissioner received a request from Humana Inc. for a proposed acquisition of control of Arcadian Health Plan Inc. and its parent company, Arcadian Management Services, Inc.  Arcadian Health Plan offers Medicare Advantage health products through the federal Centers for Medicare and Medicaid Services.

Arcadian Management Services and Humana are both for-profit corporations. Humana is proposing to become the sole owner of Arcadian Management Services and its affiliates. Arcadian Management Services is currently owned by several persons including Arcadian management and employees and also outside venture capitalists.

If approved, Humana would become the sole controlling corporation of Arcadian Management Services and Arcadian Health Plan.

History of the process

We received the application for acquisition of control in September 2011. We completed that review in December 2011.

A judge approved the proposed acquisition on March 27, 2012.

What we look at

In all proposed sales, the companies must file an application (Form A) that details:

• Financial information for both companies;
• Who will operate the health carrier at the highest levels;
• Their business plan for the health carrier; and
• How the market competition would be impacted.

Evaluation criteria

Under state law, the commissioner must approve the deal unless:

• It would substantially lessen competition or create a monopoly;
• The buyer’s plans are unfair and unreasonable to the policyholders of the health carrier;
• The buyer isn’t competent, honest, or financially sound enough to run a health carrier; or
• It is in some way “hazardous or prejudicial to the insurance-buying public.”