Senior Market Insurance Announcements

Aetna Updates: $66 Billion CVS Bid and Free Apple Watches?

October 31, 2018

[image: Aetna Updates: $66 Billion CVS Bid and Free Apple Watches?] Aetna has been making headlines quite a lot lately, and we wanted to summarize what they’ve been up to.There is currently a proposed merger between CVS and Aetna. This merger is said to be a $66 billion bet that drug costs will go down by cutting out the middleman. So far, CVS has offered to buy Aetna for more than $200 per share, but nothing has materialized just yet.Why is CVS interested in Aetna? If this goes through, it would be the most expensive effort in history that would enable a national health insurer to have full control of prescription drugs for their customers. In essence, Aetna would be able to negotiate prices with pharmaceutical manufacturers and set their own out-of-pocket costs for every drug.The other advantage would be simple health services that are offered in CVS stores, such as flu shots and blood pressure checks. Reimbursing this kind of care from a store location rather than a doctor’s office would cut healthcare costs for Aetna. This is the kind of perk that could get Aetna to agree to the deal.What are the implications of a CVS/Aetna merger? Many experts out there are drawing their own conclusions about what this really means. Some are saying the deal would put pressure on other insurance carriers along with drugmakers and retail pharmacies. The idea is that they’ll start considering mergers and partnerships as well to keep up with the cost savings this deal would put in place.Analyst Christine Arnold of investment bank Cowen & Co said that Walgreens might be looking to copy CVS in order to stay competitive. It’s rumored that Walgreens is looking at buying Express Scripts.To make matters even more interesting, Brian Tanquilut, Jefferies analyst, says that Express Scripts could also be a target for Amazon, who is reportedly looking to get into the pharmacy business.As usual, all roads lead to Amazon. (Just kidding.)Aetna and Apple partner up Another big headline for Aetna is that they’ve been working with Apple and plan to give away… wait for it… 500,000 Apple Watches to its members next year.Aetna is also working with Apple to develop a variety of health and fitness apps. These apps, co-developed by Aetna and Apple, would fit into corporate wellness programs.The apps could also be medication reminders, prescription refill reminders, and other similar solutions.Why is Aetna giving Apple Watches away for free? Aetna’s goal is to prove that smartwatches can save money on health costs. The smartwatch will hopefully incentivize customers to get more exercise and live a healthier life. This could, in turn, save Aetna a ton of money, which they’re willing to test, as the savings could outweigh the cost of the smartwatches.The Apple Watch pilot program is supposed to launch on January 1, and a variety of apps are also expected to be ready.Fitbit has also been looking to work with insurance companies by offering their product at much lower prices than Apple. And they’re starting to succeed with UnitedHealthcare, who gives credits back to policyholders with a Fitbit.So, there you have it!Aetna is making some big moves, but only time will tell where this all ends up.

Want to be the first to hear the latest senior market announcements? Join our list and we'll send them right to your inbox.