Filed by Aetna Inc.
Pursuant to Rule 425 of the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Humana
Inc.
(Commission File No.: 001-05975)
The following
communication was distributed on Aetna’s external website:
A combined Aetna-Humana would
be a leader in a highly competitive Medicare Advantage marketplace:
| · | Traditional
Medicare competes with Medicare Advantage, and it remains the option chosen by more than
two-thirds (68%) of beneficiaries. |
| · | A
combined Aetna-Humana would serve only 8 percent of the current 54 million Medicare beneficiaries,
with the remainder being served by traditional fee-for-service Medicare and more than
140 private insurers offering Medicare Advantage plans. |
| · | The
number of Medicare beneficiaries is growing. According to the US Census Bureau, the number
of Medicare beneficiaries who are 65 and older will more than double by 2060, growing
to 98.1 million. |
| · | Medicare
Advantage remains a tightly regulated marketplace. Companies bid against government determined
benchmarks, operate within regulated profit limits, and are required to spend 85% of
every premium dollar on medical costs. CMS will continue to review Medicare Advantage
plan bids to ensure that plans appropriately cover necessary services and meet stringent
network requirements. |
| · | Data
from 2015 show that beneficiaries in more than 3,000 counties nationwide can choose from
an average of 18 Medicare Advantage plan options, in addition to traditional Medicare.
The nearly 11 million beneficiaries who live in one of the 30 counties with the highest
Medicare Advantage enrollment can choose from an average of 29 Medicare Advantage plan
options, in addition to traditional Medicare. |
| · | Medicare
Advantage plans are offering consumers a stronger value proposition than ever before.
In a press release from September 2014, then-CMS administrator Marilyn Tavenner
said, “Enrollment in Medicare Advantage plans is now at an all-time high, and premiums
have fallen. Seniors and people with disabilities are benefiting from a transparent
and competitive marketplace for Medicare health and drug plans.”
|
Important Information For
Investors And Stockholders
This communication does not constitute
an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection
with the proposed transaction between Aetna Inc. (“Aetna”) and Humana Inc. (“Humana”), on August 10, 2015,
Aetna filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4,
which included a preliminary
joint proxy statement of Aetna and Humana that also constitutes a preliminary prospectus of Aetna. The registration statement
has not yet become effective. After the registration statement is declared effective by the SEC, a definitive joint proxy statement/prospectus
will be mailed to shareholders of Aetna and stockholders of Humana. INVESTORS AND SECURITY HOLDERS OF AETNA AND HUMANA ARE URGED
TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain free copies
of the registration statement and the joint proxy statement/prospectus and other documents filed with the SEC by Aetna or Humana
through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Aetna
are available free of charge on Aetna’s internet website at http://www.Aetna.com or by contacting Aetna’s Investor
Relations Department at 860-273-2402. Copies of the documents filed with the SEC by Humana are available free of charge
on Humana’s internet website at http://www.Humana.com or by contacting Humana’s Investor Relations Department
at 502-580-3622.
Aetna, Humana, their respective
directors and certain of their respective executive officers may be considered participants in the solicitation of proxies in
connection with the proposed transaction. Information about the directors and executive officers of Humana is set forth
in its Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on February 18, 2015, its
proxy statement for its 2015 annual meeting of stockholders, which was filed with the SEC on March 6, 2015, and its Current Report
on Form 8-K, which was filed with the SEC on April 17, 2015. Information about the directors and executive officers of Aetna
is set forth in its Annual Report on Form 10-K for the year ended December 31, 2014 (“Aetna’s Annual Report”),
which was filed with the SEC on February 27, 2015, its proxy statement for its 2015 annual meeting of shareholders, which was
filed with the SEC on April 3, 2015 and its Current Reports on Form 8-K, which were filed with the SEC on May 19, 2015, May 26,
2015 and July 2, 2015. Other information regarding the participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise, are contained in the preliminary joint proxy statement/prospectus
filed with the SEC and will be contained in the definitive joint proxy statement/prospectus and other relevant materials to be
filed with the SEC when they become available.
Cautionary Statement Regarding
Forward-Looking Statements
This communication contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. You can generally identify forward-looking statements by the use of forward-looking terminology
such as “anticipate,” “believe,” “continue,” “could,” “estimate,”
“expect,” “explore,” “evaluate,” “intend,” “may,” “might,”
“plan,” “potential,” “predict,” “project,” “seek,” “should,”
or “will,” or the negative thereof or other variations thereon or comparable terminology. These forward-looking
statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond Aetna’s
and Humana’s control.
Statements in this communication
regarding Aetna that are forward-looking, including Aetna’s projections as to the anticipated benefits of the pending transaction
to Aetna, the impact of the pending transaction on Aetna’s businesses, the synergies from the pending transaction, and the
closing date for the pending transaction, are based on management’s estimates, assumptions and projections, and are subject
to significant uncertainties and other factors, many of which are beyond Aetna’s control. In particular, projected financial
information for the combined businesses of Aetna and Humana Inc. is based on management’s estimates, assumptions and projections
and has not been prepared in conformance with the applicable accounting requirements of Regulation S-X relating to pro forma financial
information, and the required pro forma adjustments have not been applied and are not reflected therein. None of this information
should be considered in isolation from, or as a substitute for, the historical financial statements of Aetna or Humana Inc. Important
risk factors could cause actual future results and other future events to differ materially from those currently estimated by
management, including, but not limited to: the timing to consummate the proposed acquisition; the risk that a condition to closing
of the proposed acquisition may not be satisfied; the risk that a regulatory approval that may be required for the proposed acquisition
is delayed, is not obtained or is obtained subject to conditions that are not anticipated; Aetna’s ability to achieve the
synergies and value creation contemplated by the proposed acquisition; Aetna’s ability to promptly and effectively integrate
Humana’s businesses; the diversion of management time on acquisition-related issues; unanticipated increases in medical
costs (including increased intensity or medical utilization as a result of flu or otherwise; changes in membership mix to higher
cost or lower-premium products or membership-adverse selection; medical cost increases resulting from unfavorable changes in contracting
or re-contracting with providers (including as a result of provider consolidation and/or integration); and increased pharmacy
costs (including in Aetna’s health insurance exchange products)); the profitability of Aetna’s public health insurance
exchange products, where membership is higher than Aetna projected and may have more adverse health status and/or higher medical
benefit utilization than Aetna projected; uncertainty related to Aetna’s accruals for health care reform's reinsurance,
risk adjustment and risk corridor programs (“3R’s”); the implementation of health care reform legislation, including
collection of health care reform fees, assessments and taxes through increased premiums; adverse legislative, regulatory and/or
judicial changes to or interpretations of existing health care reform legislation and/or regulations (including those relating
to minimum MLR rebates); the implementation of health insurance exchanges; Aetna’s ability to offset Medicare Advantage
and PDP rate pressures; and changes in Aetna’s future cash requirements, capital requirements, results of operations, financial
condition and/or cash flows. Health care reform will continue to significantly impact Aetna’s business operations and financial
results, including Aetna’s pricing and medical benefit ratios. Key components of the legislation will continue to be phased
in through 2018, and Aetna will be required to dedicate material resources and incur material expenses during 2015 to implement
health care reform. Certain significant parts of the legislation, including aspects of public health insurance exchanges, Medicaid
expansion, reinsurance, risk corridor and risk adjustment and the implementation of Medicare Advantage and Part D minimum medical
loss ratios (“MLRs”), require further guidance and clarification at the federal level and/or in the form of regulations
and actions by state legislatures to implement the law. In addition, pending efforts in the U.S. Congress to amend or restrict
funding for various aspects of health care reform, and litigation challenging aspects of the law continue to create additional
uncertainty about the ultimate impact of health care reform. As a result, many of the impacts of health care reform will not be
known
for the next several years. Other
important risk factors include: adverse changes in health care reform and/or other federal or state government policies or regulations
as a result of health care reform or otherwise (including legislative, judicial or regulatory measures that would affect Aetna’s
business model, restrict funding for or amend various aspects of health care reform, limit Aetna’s ability to price for
the risk it assumes and/or reflect reasonable costs or profits in its pricing, such as mandated minimum medical benefit ratios,
or eliminate or reduce ERISA pre-emption of state laws (increasing Aetna’s potential litigation exposure)); adverse and
less predictable economic conditions in the U.S. and abroad (including unanticipated levels of, or increases in the rate of, unemployment);
reputational or financial issues arising from Aetna’s social media activities, data security breaches, other cybersecurity
risks or other causes; Aetna’s ability to diversify Aetna’s sources of revenue and earnings (including by creating
a consumer business and expanding Aetna’s foreign operations), transform Aetna’s business model, develop new products
and optimize Aetna’s business platforms; the success of Aetna’s Healthagen® (including Accountable Care Solutions
and health information technology) initiatives; adverse changes in size, product or geographic mix or medical cost experience
of membership; managing executive succession and key talent retention, recruitment and development; failure to achieve and/or
delays in achieving desired rate increases and/or profitable membership growth due to regulatory review or other regulatory restrictions,
the difficult economy and/or significant competition, especially in key geographic areas where membership is concentrated, including
successful protests of business awarded to Aetna; failure to adequately implement health care reform; the outcome of various litigation
and regulatory matters, including audits, challenges to Aetna’s minimum MLR rebate methodology and/or reports, guaranty
fund assessments, intellectual property litigation and litigation concerning, and ongoing reviews by various regulatory authorities
of, certain of Aetna’s payment practices with respect to out-of-network providers and/or life insurance policies; Aetna’s
ability to integrate, simplify, and enhance Aetna’s existing products, processes and information technology systems and
platforms to keep pace with changing customer and regulatory needs; Aetna’s ability to successfully integrate Aetna’s
businesses (including Humana, Coventry, bswift LLC and other businesses Aetna may acquire in the future) and implement multiple
strategic and operational initiatives simultaneously; Aetna’s ability to manage health care and other benefit costs; adverse
program, pricing, funding or audit actions by federal or state government payors, including as a result of sequestration and/or
curtailment or elimination of the Centers for Medicare & Medicaid Services’ star rating bonus payments; Aetna’s
ability to reduce administrative expenses while maintaining targeted levels of service and operating performance; failure by a
service provider to meet its obligations to us; Aetna’s ability to develop and maintain relationships (including collaborative
risk-sharing agreements) with providers while taking actions to reduce medical costs and/or expand the services Aetna offers;
Aetna’s ability to demonstrate that Aetna’s products and processes lead to access to quality affordable care by Aetna’s
members; Aetna’s ability to maintain Aetna’s relationships with third-party brokers, consultants and agents who sell
Aetna’s products; increases in medical costs or Group Insurance claims resulting from any epidemics, acts of terrorism or
other extreme events; changes in medical cost estimates due to the necessary extensive judgment that is used in the medical cost
estimation process, the considerable variability inherent in such estimates, and the sensitivity of such estimates to changes
in medical claims payment patterns and changes in medical cost trends; a downgrade in Aetna’s financial ratings; and adverse
impacts from any failure to raise the U.S. Federal government's debt ceiling or any sustained U.S. Federal government shut down.
For more
discussion of important risk
factors that may materially affect Aetna, please see the risk factors contained in Aetna’s 2014 Annual Report on Form 10-K
(“Aetna’s 2014 Annual Report”) on file with the Securities and Exchange Commission (“SEC”). You
should also read Aetna’s 2014 Annual Report and Aetna’s Quarterly Report on Form 10-Q for the quarter ended June 30,
2015, on file with the SEC, for a discussion of Aetna’s historical results of operations and financial condition.
No assurances can be given that
any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do occur, what impact
they will have on the results of operations, financial condition or cash flows of Aetna or Humana. Neither Aetna nor Humana
assumes any duty to update or revise forward-looking statements, whether as a result of new information, future events or otherwise,
as of any future date.
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