Regulators in Pennsylvania and 17 other states will scour health insurer Aetna’s plan to buy rival Humana, looking for signs the proposed merger might drain competition, the Pennsylvania Insurance Department said Monday.

Hartford, Conn.-based Aetna Inc. announced July 3 it would buy Humana Inc. for about $37 billion in cash and stock. The deal would create the second-largest domestic health insurer by membership, with more than 33 million people covered.

But the companies need approval from the U.S. Department of Justice, which will rely in part on state regulators to evaluate how the acquisition might affect policyholders and regional insurance markets. Regulators in Kentucky, where Humana maintains its Louisville headquarters, will lead the state-level evaluation, according to the Pennsylvania Insurance Department.

“Because there’s a presence for both companies here, we will look at it. The Humana presence in Pennsylvania is very, very small,” said Ron Ruman, a spokesman for the insurance department. He estimated the company’s market share statewide at 1.1 percent.

Aetna accounts for about 12 percent of the Pennsylvania health insurance market, according to the department. 

Mr. Ruman said the insurance department has no set timeline but will move swiftly on the review. He said Aetna will file merger applications in all 18 states where Humana does business.

Pennsylvania regulators must approve the application as long as it does not “substantially lessen competition,” foster a monopoly or endanger the public, among several other conditions, Mr. Ruman said.

State Attorney General Kathleen Kane’s office also would assess whether the proposal could inflate insurance premiums or inhibit health care access, her spokesman Chuck Ardo said.

Reuters contributed. Adam Smeltz: asmeltz@post-gazette.com, 412-263-2625 or on Twitter @asmeltz.

First Published: July 14, 2015, 4:00 a.m.