Aetna's announcement Tuesday that it would be pulling out of about two-thirds of the Obamacare exchanges was countered with speculation from the administration that the move was less about Aetna losing money in the program than retaliation against the government by the company. Last month, the Department of Justice filed suit to block the company from acquiring Humana. Turns out, the administration wasn't just speculating about Aetna's motive.
When reporters on Monday asked whether Aetna was also reacting to the administration’s attempt to thwart its merger with Humana, company officials brushed off the questions, according to accounts in the Hartford Courant, Politico, and USA Today.
But just last month, in a letter to the Department of Justice, Aetna CEO Mark Bertolini said the two issues were closely linked. In fact, he made a clear threat: If President Barack Obama’s administration refused to allow the merger to proceed, he wrote, Aetna would be in worse financial position and would have to withdraw from most of its Obamacare markets, and quite likely all of them.
Bertolini penned the letter, which The Huffington Post obtained through a Freedom of Information Act request, on July 5 ― 16 days before the Justice Department announced it would fight the Humana deal. The department had asked Aetna how, if at all, a decision on the proposed merger would affect Aetna’s willingness to offer insurance through the exchanges.
Bertolini responded bluntly. Aetna supported the law’s goal to expand coverage and planned to increase its exchange offerings next year, in the hopes that the exchanges would stabilize as enrollment grew, he wrote.
But if the Justice Department were to block the merger, Bertolini warned, Aetna could no longer sustain the losses from its exchange business, forcing it sharply change direction.
"[I]f the deal were challenged and/or blocked," Bertolini warned, "we would need to take immediate actions to mitigate public exchange and ACA small group losses." So the administration definitely knew this was coming. It's to the Justice Department's credit that they ignored the company's threats and moved to block the acquisition anyway.
But Aetna might have just bitten off more than they intended to.
Because, as Sen. Bernie Sanders says, what more justification do Congress and the White House need to put a public option on the exchanges? "In my view," Sanders said in reaction to Aetna's announcement, "the provision of healthcare cannot continue to be dependent upon the whims and market projections of large private insurance companies whose only goal is to make as much profit as possible." It can't, which is one of the reasons Hillary Clinton has adopted the public option in her campaign. It needs to become part of the campaign narrative for every Democrat running for Congress, because Clinton will need them in order to make a public option happen.