Aetna to buy Prodigy Health Group for $600 million Posted: May 3rd, 2011

In an effort to diversify its product offerings, health insurer Aetna has announced plans to purchase Prodigy Health Group. The group is the largest independent third party administrator in the nation for self-funded health insurance plans. The sale will cost Aetna $600 million and is expected to be finalized in the second half of 2011.

Prodigy Health Group operates under three names: Meritain Health, American Health and Scrip World. Together, the businesses provide services to 600,000 medical members and 450,000 pharmacy members. Subscribers to the plans are spread throughout 15 states.

Before being finalized, the purchase is subject to review by the federal government to ensure compliance with antitrust laws. Aetna plans to finance the acquisition with available resources.

According to Aetna, Prodigy Health Group will continue to operate under its own management structure and use its existing brand names.

"Prodigy extends Aetna's reach into the third-party administrator business while providing a separate option under the Prodigy brands that addresses affordability and quality for middle-sized and small businesses and customers who are primarily price-focused," said Aetna Chairman, CEO and President Mark T. Bertolini in a statement.