Battle of the bulls: Aetna threatened ACA participation over Humana merger blockage
- In July, Aetna sent a letter to the Justice Department insinuating it would leave the ACA market if its pending merger with Humana was blocked by the DOJ, The Huffington Post reported.
- Aetna announced late Monday it was exiting nearly 70% of the ACA markets it participated in next year (parsing down 778 counties to 242).
- On Monday, CEO Mark Bertolini cited losses in the millions as the reason for the decision. However, the July letter obtained by The Huffington Post implies the decision was more influenced by the Justice Department lawsuit.
There had been industry speculation that the recent change of heart on Aetna over the ACA exchanges has in part due to the decision from the DOJ to attempt to block its pending merger with Humana. Not too long ago, Bertolini had been supporting the ACA exchanges and the marketplace.
While the carrier as early as April continued to believe the exchanges were a good investment of resources, Monday found Bertolini singing a different tune, “Following a thorough business review and in light of a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in our individual products, we have decided to reduce our individual public exchange presence in 2017, which will limit our financial exposure moving forward."
Aetna also on Monday announced the company will continue to offer off-exchange plans for most of the counties it offered plans on the ACA market in 2016.
And yet, The Huffington Post's Jeffrey Young and Jonathan Cohn's uncovering of Bertolini's July letter tells a different tale. "[I]t 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. By contrast, if the deal proceeds without the diverted time and energy associated with litigation, we would explore how to devote a portion of the additional synergies ... to supporting even more public exchange coverage over the next few years," the letter to the Justice Department reads.
A spokesperson on Tuesday told The Huffington Post that the shift was due to gaining "full visibility into our second quarter individual public exchange results."
Follow Jeff Byers on Twitter