Aetna to reduce exchange offerings
Adding to the merger controversy is an announcement by Aetna in early August that it would withdraw from 11 of the 15 states where it sells health insurance on Affordable Care Act exchanges.
Virginia is one of the four states where the insurer will continue to sell policies on a health exchange.
Aetna’s action has become a flashpoint in the 2016 presidential campaign, sparking debate between Republicans and Democrats over the viability of Obamacare. (In addition to Aetna, other insurers, including UnitedHealthcare and Humana have announced cutbacks in their exchange offerings.)
Aetna, the nation’s third-largest health insurer, blamed its decision on losses from the exchanges. Those losses have totaled $430 million since 2014, including $200 million in the second quarter of this year.
Democrats, however, question the company’s motives, pointing to a July 5 letter from Aetna’s CEO, Mark T. Bertolini, to the U.S. Justice Department, which was first reported in The Huffington Post.
The letter responded to a DOJ question about how Aetna’s participation in exchanges would be affected if its merger plans were thwarted.
A DOJ challenge to the merger “would have a negative financial impact on Aetna and would impair Aetna’s ability to continue its support [of the exchanges], leaving Aetna with no choice but to take actions to steward its financial health,” the letter says.
Noting the company’s losses since 2014, the letter says, “Our ability to withstand these losses is dependent on our achieving anticipated synergies in the Humana acquisition.”
Bertolini says in the letter that, with the merger, the company had planned to expand its participation in exchanges from 15 to 20 states next year. If the merger is blocked, however, “instead of expanding to 20 states next year, we would reduce our presence to no more than 10 states.”
Some Democrats see the letter as a threat by Aetna in response to DOJ’s opposition to the merger.
The Wall Street Journal, however, says that Bertolini simply was stating financial facts in response to the DOJ’s questions. “Public companies have a responsibility to shareholders, and the wonder is that any insurer is still part of the exchanges,” the newspaper said in an editorial.