- Aetna CEO Mark Bertolini told investors on Tuesday that the insurer will not re-enter the ACA exchange marketplaces in the 11 states it pulled out of in August and is still considering whether to continue in the four states where it remains. He said the reform law has not met its goals.
- Aetna reported it lost 377,000 members in 2016 but revenue was up nearly 5% at $60.2 billion. Revenue for fourth quarter was up 4.5% at $15.7 billion, mostly from increased participation in Medicaid and Medicare Advantage plans.
- The federal judge who recently blocked Aetna’s planned merger with Humana wrote in his ruling that Aetna executives made their decision to withdraw from some markets in an effort to create leverage for a favorable merger ruling — not to minimize financial losses, as executives had claimed.
It was a mostly positive fourth quarter earnings report for Aetna, one of the “big five” insurers that was looking to expand its territory with the Humana merger. However, the biggest reverberations may come from its decision not to re-enter the 11 ACA exchange markets it exited last year.
Aetna had been a proponent of the law and the marketplace exchanges but still pulled out of nearly 70% of the markets it had been participating in after seeing the financial impacts on its business. Those who signed up for the exchanges turned out to be sicker and more expensive than insurers had expected, resulting in losses of more than $400 million for the payer over the past two years.
Aetna is closely watching contentious debate on the Hill about the future of the ACA. Insurers are among many in the healthcare industry trying to deal with the uncertainty that the new political climate has created around the ACA and possible replacement laws. The GOP has not put forth an agreed upon, detailed replacement plan but President Donald Trump is already moving forward with executive actions meant to weaken enforcement of the law.
Repealing the ACA without a replacement would create worrying instability for insurance markets. If the individual mandate is eliminated, there would be little incentive for younger, healthier people to obtain coverage. Insurers also don’t know whether they would continue to receive cost-sharing subsidies if plans for a repeal goes forward.
The report comes as Aetna considers whether to appeal the merger ruling. Meanwhile, the company faces a class action lawsuit from shareholders arguing they lost more than $1 billion after the court ruling blocking the merger.
Aetna CEO Bertolini said the company will decide by Feb. 15 whether to appeal the merger decision. A similar ruling is expected soon on the proposed merger of another two of the “big five” — Anthem and Cigna.