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Tricare ends regional contract with insurer Aetna

Fri, 05/07/2010 - 7:30am
The Associated Press

The Defense Department's health care program for military members and their families has reversed a decision it made last summer and awarded a contract worth about $17 billion to Health Net Inc. over another insurer, Aetna Inc.

The Tricare program had awarded the contract for its North region to Aetna last July. But Health Net appealed the decision, and Tricare announced Wednesday that it ended the Aetna contract.

Aetna officials said in a statement they were "extremely disappointed" with the decision, which the Hartford, Conn., insurer is reviewing.

"We believe we acted appropriately throughout the procurement process and that no non-public information was ever used in preparing the bid," said Susan M. Peters, Aetna's president of Government Health Plans, in the statement.

The contract originally was supposed to start April 1, but that was delayed a year because of the appeal, Aetna spokesman Fred Laberge said. Since the contract had not started, the Tricare decision has no impact on Aetna's enrollment or earnings this year, the spokesman said.

Tricare provides health care coverage for more than 9.6 million military members, retirees and their families.

The North Region includes about 2.9 million beneficiaries in several states including Maine, New York, Illinois, Iowa and Virginia, said Health Net, which is based in Woodland Hills, Calif.

Tricare also said Wednesday that it was issuing an amended request for proposals for its South Region. It had decided last summer to award the contract for that region to UnitedHealth Group Inc. over Humana Inc.

A protest over its West Region contract is still pending.

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