Aetna faces new suit after shareholders lost billions over blocked Humana merger
The Aetna-Humana ruling included shocking evidence that Aetna executives attempted to use withdrawal from ACA exchanges as leverage in the merger deal. Aetna executives never actually assessed the profitability of their exchanges in the 17 counties from which they withdrew; they ended up staying in some unprofitable states and withdrawing from profitable ones, according to court documents.
As a result of the misleading and false statements, Aetna’s stock prices were artificially high until the court’s Memorandum Opinion revealed the facts, argues a new class action suit being filed against the insurer.
After the opinion was released, Aetna’s stock price dropped $3.33 per share, or 2.7%, from January 20 to January 23 — resulting in a loss of $1.17 billion of the company’s market capitalization, the suit stated. Westchester Putnam Counties Heavy & Highway Laborers Local 60, after sustaining heavy losses due to investments in Aetna, have demanded a trial by jury.
Despite attempts by Aetna executives to limit their discussion of controversial topics to in-person or phone conversations, enough e-mails were found through the pre-merger discovery process to make it clear that Aetna’s decision to pull out of many exchanges was based not on profits, but on the desire to improve their litigation position and push through the planned merger.
In fact, the court memorandum states that company executives “never assessed the profitability of Aetna’s individual business in the 17 complaint counties” – counties in which the Department of Justice (DOJ) felt that a merger would threaten competition. As Axios' Bob Herman points out, Aetna left ACA markets that were profitable for the insurer, including Florida. Furthermore, Aetna had threatened to pull out of additional exchanges should the DOJ succeed in blocking the merger.
For the class action suit, the parties are required to confer within 30 days and jointly file a report 14 days after that. Motions for summary judgment must be filed within seven months.
- United States District Court for the District of Columbia United States of America, et al. v. Aetna Inc., et al
- United States District Court, District of Connecticut Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefits Funds v Aetna Inc., Mark T. Bertolini, and Shawn M. Guertin
- Axios How Aetna tried to use Obamacare as leverage in the Humana deal
- Healthcare Dive Judge blocks Aetna-Humana merger