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Aetna says its plan to decrease its Affordable Care Act exchange participation is due to continuing financial losses--but a recently surfaced document also ties the decision to the lawsuit against its deal with Humana.
In a letter obtained by The Huffington Post thorough a Freedom of Information Act request, Aetna CEO Mark Bertolini tells the Justice Department that how regulators treat the Aetna-Humana deal will have implications for the struggling exchanges.
“It is very likely that we would need to leave the public exchange business entirely and plan for additional business efficiencies should our deal ultimately be blocked,” he wrote.
Bertolini wrote his letter July 5 in response to the DOJ’s question about how its review of the deal with Humana might affect Aetna’s exchange participation, The Huffington Post notes. On July 21, the DOJ filed lawsuits seeking to block both the Aetna-Humana and Anthem-Cigna mergers.
If Aetna could avoid the “diverted time and energy associated with litigation” against its acquisition, Bertolini wrote, the company would explore the possibility of devoting “additional synergies” to supporting greater ACA exchange coverage in the coming years.
When reached for comment, Aetna spokesman T.J. Crawford said in an email that the insurer's written response to the DOJ "should not come as a surprise given [that] a loss of deal synergies coupled with a potential break-up fee would raise further questions about sustaining a position in a business where we have yet to break even."
Since the letter was sent, Aetna also gained "greater visibility" into deterioration of its ACA exchange business, Crawford wrote. "That deterioration, and not the DOJ challenge to our Humana transaction, is ultimately what drove us to announce the narrowing of our public exchange presence for the 2017 plan year."
Aetna's letter doesn't change the fact that they were, in fact, losing money on the ACA marketplaces.
— Larry Levitt (@larry_levitt) August 17, 2016
Before Aetna announced it would pull back from the exchanges next year, Bertolini had voiced support for the marketplaces, even as executives like UnitedHealth’s Stephen Hemsley took a more critical tone.
Anthem CEO Joseph Swedish, meanwhile, said recently that joining with Cigna would allow the companies to expand to nine additional state marketplaces in which neither currently participates. This expansion, he added, would help stabilize pricing in the exchange market.
Humana has also said it will reduce its footprint in the individual market in 2017--a position it has taken publicly since before the DOJ announced its lawsuit against the two insurers’ deal.
- read The Huffington Post article
- here is Bertolini’s letter