Buy low, goes the old advice about stocks. And as low as Oxford Health Plans' stock has gone in recent months, the Connecticut-based HMO might look like a pretty good takeover target.But to Aetna? The same company that has had difficulty digesting its acquisition of U.S. Healthcare?
Neither company would comment on Wall Street buzz that Aetna U.S. Healthcare is sizing up Oxford for possible acquisition. Analysts are divided about whether a merger would work. Such a move might make strategic sense because the two serve overlapping markets, particularly the New York metropolitan region. On the other hand, they say, Oxford's payment and legal problems are so deep, Aetna U.S. Healthcare might wind up inheriting a mess that wouldn't be attractive to anyone--even at the bargain price Oxford could fetch.
While Wall Street pondered the possibilities, Oxford quietly continued to deal with its financial problems. Oxford asked the New York State insurance department for permission to raise premiums for individual HMO and point-of-service enrollees by at least 50 percent. For members who do not receive coverage through employers, that could translate into as much as a $100-a-month cost hike. The department has until May to respond to Oxford's request.