The withdrawal of Aetna from several ACA exchanges, citing financial losses, sounds like bad news for the ACA from a fundamental viewpoint – if insurance companies lose money on these policies, then perhaps ACA won’t work.
Except there may be more to it than that, as Steve Benen on MaddowBlog notes, along with Kevin Drum and others:
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.”
I hope the government sits tight and let’s them throw away their “losses”, which may be profits. Perhaps impose a penalty – don’t permit re-entry to the exchanges they exit for a year or five.
