Aetna, one of the largest health insurance providers in America, announced they will be canceling their insurance plans in eleven of the fifteen state health insurance exchanges they currently do business in. But why, exactly, is Aetna axing 70% of their marketplace plans?
President Obama’s Affordable Care Act (Obamacare) is making our lives measurably better. This is terrible news for Republicans, so, naturally, they have been gleefully seizing on Aetna’s announcement as proof the Affordable Care Act is “collapsing” — and it certainly is bad news for consumers, who will now likely have fewer insurance choices and higher premiums next year.
Aetna claims they are withdrawing because they have lost $430 million on the exchanges, but this claim doesn’t add up. First of all, Aetna posted a 38% profit increase in their most recent quarterly figures, even factoring in ACA plans that aren’t turning a profit, and just this month, they beat projected earnings by 4%. Second of all, just three months ago, Aetna CEO Mark Bertolini announced plans to participate in five more exchanges starting in 2017. So, why the sudden reversal?
Coincidentally, only one significant thing has happened at Aetna since that time: Three weeks ago, President Obama’s Justice Department filed an antitrust lawsuit to block them from acquiring Humana.
Now, ask yourself, which is more likely? 1) Aetna’s health plans suddenly became unsustainable in the span of three months? Or 2) Aetna is retaliating after the Justice Department refused to let them gobble up a major competitor? I’ll give you a hint: last month Bertolini wrote a letter to the Justice Department threatening to withdraw from the exchanges if they did not drop the lawsuit. Oops!
[I]f the deal were challenged and/or blocked we would need to take immediate actions to mitigate public exchange and ACA small group losses. Specifically, if the DOJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint …. [I]nstead of expanding to 20 states next year, we would reduce our presence to no more than 10 states .… [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.
Aetna just blatantly threatened to take away people’s access to healthcare if they didn’t get their way. And then they made good on that threat, without regard for the consequences to people’s lives.
It’s time to close the loopholes that have given corporations like Aetna such outsized power over insurance markets — and ensure that the primary concern in our healthcare system is the American people.