Aetna Chief Executive Officer Mark Bertolini said in a letter to the Department of Justice during a review of the company’s deal to purchase its rival, Humana, that if the DOJ challenged the merger, then Aetna would pull out of most of the government-run state insurance exchanges, according to Reuters.
The Huffington Post is responsible for making the letter known after obtaining it through the Freedom of Information Act.
In the July 5 letter, Bertolini said it would be some time before the company would be able to recoup the deep losses incurred over the past two-and-a-half years in the government-subsidized insurance plans created after the Affordable Care Act became law. But the letter also pointedly said that if Aetna was not allowed to merge with Humana, then Aetna would pull out of the exchanges.
In part, after detailing the insurer’s financial woes, the letter reads: Finally, based on our analysis to date, we believe it 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 (which are larger than we had planned for when announcing the deal) to supporting even more public exchange coverage over the next few years.
Bertolini’s letter was in response to a request from Assistant Attorney General William Baer on June 30, asking for information on the consequences of not completing the merger. Specifically, the DOJ wanted information on the costs of the breakup fee, Aetna’s business strategy, and any other documents related to the Humana merger.
CNBC is reporting that an Aetna spokesman, TJ Crawford sent an email statement saying that after the July 5 letter was sent to the DOJ, the company had a better view of its second-quarter performance.
“That deterioration, and not the DOJ challenge to our Humana transaction, is ultimately what drove us to announce the narrowing of our public exchange presence for the 2017 plan year,” Crawford said.
