Louisville-based Humana Inc., which provides health insurance for thousands of Wisconsin residents, may be for sale, according to a report by The Wall Street Journal.
The company has received indications of takeover interest and is working with advisers at Goldman Sachs Group Inc. to explore its options, including a sale, according to the report.
Such a transaction could trigger a wave consolidations in the industry, analysts said.
Humana is one of five health insurers that bankers and analysts have long considered ripe for consolidating in the industry. Besides Aetna and Cigna, the other major insurers are UnitedHealth Group Inc., the largest by revenue, and Anthem Inc.
Humana receives the bulk of its revenue from patients using Medicare, the federal health-insurance system for older Americans that is often administered by private insurers.
The Affordable Care Act has created millions of potential new customers by requiring individuals to have health insurance.
“While impossible to predict timing, there is a consistent theme of consolidation being openly discussed by a number of management teams in the sector,” J.P. Morgan analysts wrote in a recent research note.
Humana posted pretax income of about $1.1 billion on revenue of $48.5 billion last year. In the first quarter, its membership rose to 14.2 million customers and revenue jumped 18 percent.
According to the Wisconsin Office of the Commissioner of Insurance, Humana ranks fourth in market share in the state, trailing only UnitedHealthcare of Wisconsin, Security Health Plan of Wisconsin and Network Health Insurance Corp.