A logo sign outside of a facility occupied by Aetna, Inc., in Blue Bell, Penn., on June 28, 2015. 
Photo by Kristoffer Tripplaar/AP

Insurer’s ACA plans spark unexpected controversy

Updated
While nearly all of the recent news surrounding the Affordable Care Act has been positive, this week brought an important setback: Aetna, one of the nation’s largest private insurers, announced that it’s losing money through “Obamacare” plans. As a result, Aetna said it will now “sell individual insurance on the government-run online marketplaces in only four states next year, down from the current 15 states.”
 
For the ACA system, this was clearly a step in the wrong direction. For the exchange marketplaces to be effective, consumers need private insurers to compete for their business. The more insurance companies scale back, the less effective the law.
 
To be sure, this isn’t a complete disaster – as the New York Times’ editorial board explained, the Affordable Care Act can certainly survive this – but there’s no denying the fact that it’s bad news for the system overall.
 
What’s less clear is why, exactly, Aetna made this decision. As Mother Jones’ Kevin Drum noted this week, “Aetna did a lot of business on the Obamacare exchanges, and until recently claimed that it was a good investment. Now they’ve suddenly changed their mind. Why? No one can say for sure, but the skeptical among us suspect it’s payback. The Obama administration blocked their proposed merger with Humana, so now they’re going to exit Obamacare. Nyah nyah nyah.”
 
There’s fresh evidence Kevin may have been onto something. The Huffington Post’s Jonathan Cohn and Jeffrey Young published a rather striking report overnight.
[Aetna’s] move also was directly related to a Department of Justice decision to block the insurer’s potentially lucrative merger with Humana, according to a letter from Aetna’s CEO obtained by The Huffington Post. […]
 
[J]ust 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.
The report added that for ACA supporters, this suggests the insurer “was using its participation in Obama’s signature domestic policy initiative as a bargaining chip in order to secure approval of a controversial business deal.”
 
Remember, it was just four months ago that Aetna CEO Mark Bertolini sounded quite positive about the company’s participation in exchange marketplaces, describing them as a “good investment” in a call with investors. A month later, he again said Aetna planned to participate in ACA exchanges.

Politico noted the only real difference between now and then: “The Department of Justice’s effort to stop Aetna’s proposed $37 billion merger with Humana. The two sides go to court in December.”

Affordable Care Act, Health Care, Health Care Policy and Obamacare

Insurer's ACA plans spark unexpected controversy

Updated