Updated 5:27 p.m.. with comments from Sen. Chris Murphy.
Washington – In a strongly worded letter to Aetna CEO Mark Bertolini, Sen. Elizabeth Warren and several other Democrats, including Sen. Bernie Sanders, have asked the company to explain why it entered into a “risky” merger deal with Humana that now makes it financially unable to sell policies in 11 state health insurance exchanges.
“Until the Justice Department indicated that it might challenge the merger, Aetna had repeatedly expressed its commitment to remaining in the public exchanges, and it had even discussed the possibility of expanding its ACA exchange footprint to more states in 2017,” wrote Warren.
Then, just a couple of weeks before the Justice Department sued to stop the merger in July, Aetna warned that it would not be able to continue to offer its policies on the Affordable Care Act’s health insurance exchanges unless the merger were approved.
Sens. Edward Markey, D-Mass.; Bill Nelson, D-Fla.; and Sherrod Brown, D-Ohio; also signed the letter. Connecticut’s Democratic senators – Richard Blumenthal and Chris Murphy – did not.
Aetna says it has lost about $300 million on the exchanges. The company also said the payment of a $1 billion “breakup” fee to Humana if the merger were not completed at the end of the year also impairs its ability to continue to sell policies on 11 of the 15 exchanges it participates in now.
Aetna and Humana said they will challenge the Justice Department’s lawsuit to block the merger.
“Singling Aetna out may be politically convenient during election season, but this letter ignores realities and takes the focus away from needed reforms,” said Aetna spokesman T.J. Crawford. “We are one of many insurers, large and small, that has been forced to reduce its public exchange participation due to an increasingly unstable marketplace.”
He did not mention the costs incurred by the Justice Department’s move to block the merger, but said the Affordable Care Act “is not sustainable without bipartisan action that improves access, affordability and quality of care for consumers.”
Murphy pushed back on Aetna’s criticisms of the ACA, saying, “The Affordable Care Act is working, and more people have health insurance than ever before.”
But the Connecticut senator defended Aetna, saying it had not acted in “bad faith,” and that the insurer should not be a “scapegoat.”
“While I’m disappointed Aetna has decided to leave several health exchange marketplaces, there is simply no basis to believe they made this call in bad faith,” he said. “Aetna has been clear that they may reenter those exchanges they are exiting if conditions improve. These exchanges should be a win-win proposition for insurers and consumers, and our focus shouldn’t be trying to find scapegoats – it should be on ensuring the Affordable Care Act works for everyone.”
Yet the senators who signed the letter to Bertolini said the company knew before it entered into an agreement with Humana that it faced challenges in obtaining approval of the merger because analysts and experts had warned it would “face intensive scrutiny from antitrust regulators.”
“The inclusion of this $1 billion fee now appears to be an expensive and risky bet on a highly uncertain outcome, an outcome that could limit competition in the marketplace and have a negative impact on consumer choices in the states affected by this change,” the senators wrote.
The senators asked Bertolini to disclose “what exact costs Aetna will incur now that the Justice Department has challenged the merger” and how much it will cost the company if the merger is ultimately blocked.
They also asked Bertolini why his company agreed to the $1 billion breakup fee and whether it was aware it would endanger its participation in the ACA exchanges.
They also asked the Aetna CEO to tell them exactly when it determined that continued participation in the exchanges would be contingent upon approval of the merger. They also asked how many ACA enrollees have contacted the company over its decision to withdraw from the ACA exchanges.