The chief executive officer of Aetna Inc. says that “marketplace reality” is pushing the company to exit many public health care exchanges and dismissed criticism of the company by a group of U.S. senators as “unfounded accusations.”
Aetna CEO Mark Bertolini wrote to the senators who said Aetna was seeking to stem financial losses when it announced it will quit nearly 70 percent of the counties with public health exchanges next year.
Bertolini was responding to a letter from Democratic Sens. Elizabeth Warren and Edward Markey of Massachusetts, Sherrod Brown of Ohio, Bill Nelson of Florida and Sen. Bernie Sanders, a Vermont independent. The lawmakers said Aetna’s decision to quit numerous health exchanges “appears to be an effort to pressure the Justice Department into approving” its proposed $37 billion purchase of Humana Inc.
Bertolini told the lawmakers they made “several unfounded accusations about Aetna’s intentions as they relate to the public health care exchanges” and the Humana deal.
Aetna spokesman T.J. Crawford said Monday the Hartford insurer has not received a response from the senators.
Connecticut’s Chris Murphy and Richard Blumenthal did not join their five colleagues in signing the letter to Aetna. Murphy said “there is simply no basis to believe” Aetna acted in bad faith, while Blumenthal said he hopes the insurer “will explain more fully its reasons for withdrawing from the public exchanges.”
Bertolini, who has not made a commitment for Aetna to remain in Hartford if the deal with Louisville-based Humana ultimately goes through, told the senators that Aetna is not alone as it leaves Affordable Care Act markets. UnitedHealth Group, the nation’s biggest health insurer, announced in April it will cut its participation in public health insurance exchanges to a handful of states next year after expanding to nearly three dozen for this year.
“In this highly politicized environment, it may be tempting to make such accusations rather than examine the forces creating an unsustainable public exchange marketplace, but they do not move us toward fixing the problem,” he said.
It said it expects to lose $650 million this year on its exchange business, up from its previous projection for $525 million. The insurer lost $475 million in 2015.
Publicly traded managed care companies have acknowledged health care losses and declining margins related to the health exchanges. Policymakers see the problem as too few healthy people in the insurance pool and insufficient enforcement of eligibility.
Attorney General Loretta Lynch announced in July that the Obama administration is headed to court to block the Aetna-Humana deal and a separate proposal by Anthem Inc. to buy Cigna Corp. for $57 billion.
Shortly after, Aetna said it will exit numerous health exchanges, cutting the number of its Affordable Care Act patients by 20 percent of its total 838,000, or about 168,000.
Bertolini said most payers this year were exposed to an “unsustainable imbalance” in the individual-market risk pool. Exchange-related policies deter healthier individuals from participating and leave a disproportionate share of members requiring high-cost, complicated health care, he said.
“The occurrence of those negative developments was the actual catalyst for our decision to reduce our footprint,” he said.
Bertolini said Aetna was complying with a requirement by the Department of Justice when it wrote in early July it would take immediate action to reduce its presence in health exchanges next year to stem financial losses if the agency sued to block the Humana deal.
The five senators said Aetna made a “dangerous and irresponsible bet” that the Justice Department would not block the Humana deal because Aetna structured the deal in a way that would damage itself and public exchanges if the purchase was halted.
A $1 billion “breakup fee” to be paid by Aetna to Humana if the deal falls through “appears to be an expensive and risky bet on a highly uncertain outcome” that could limit competition and consumer choice, the lawmakers said.