Aetna, a major insurer that announced that it was significantly scaling back its Obamacare exchange participation this week, warned in a letter to Department of Justice sent in July that it would pull out of a significant portion of the marketplaces if its proposed merger with Humana was blocked. The letter was obtained and first reported on by the Huffington Post.
The department had asked how its decision whether to block the merger would affect the insurer’s presence on the marketplaces. Aetna CEO Mark Bertolini responded that “if the DOJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint.”
Bertolini said that, with a blocked merger, “we would need to take immediate actions to mitigate public exchange and ACA small group losses.”
“[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,” he said. “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 Justice Department sued to block the Aetna-Humana merger in mid-July.
When Aetna announced Monday that it intended to scale back its Affordable Care Act participation, some ACA supporters began to speculate that the DOJ’s move to block the merger played a role in the insurer’s decision to withdraw from nearly 70 percent of the counties where it was participating on exchanges.
Back in April, Aetna was bullish on its prospects on the exchanges, with Bertolini telling investors the company thought it was a “a good investment.”
Nevertheless, the struggles the insurer has since said it has experienced on the individual marketplace — on Monday, it said it had lost $430 million on the exchanges since 2014 — exemplified some of the obstacles other major insurers have said they were facing.
Bertolini has claimed that the company’s shift in ACA strategy was due to new information becoming available since the April comments.
