What Aetna Forgot to Mention About Its Obamacare Losses

[Hissyspit]

http://www.charlotteobserver.com/opinion/editorials/article96217822.html

EDITORIALS
AUGUST 17, 2016 4:00 PM

THE OBSERVER EDITORIAL BOARD

What Aetna forgot to mention about its Obamacare losses

On Monday evening, one of the nation’s largest insurers released a statement announcing its intention to stop offering individual coverage in most Obamacare markets. Aetna’s announcement, just six paragraphs long, explained that it had lost more than $430 million on the public exchanges since 2014, thanks largely to too many high-cost (read: sick) enrollees.

Aetna regretted its decision, said CEO Mark Bertolini in the statement, but doing business in the Obamacare marketplaces created “significant sustainability concerns.”

It’s the same complaint other insurers have voiced about Obamacare, and it mirrors what Bertolini said just two weeks ago in a second-quarter earnings call. But earlier this year, Bertolini let slip another figure that didn’t make it into Monday’s six paragraphs: Aetna enjoyed a record $6.5 billion in government program premiums in the first quarter.

In other words, doing business with the government isn’t so bad after all. In fact, it’s gotten especially good since Obamacare came along, thanks largely to the Affordable Care Act’s expansion of Medicaid in most states (but not yet North Carolina.) Medicaid, like Medicare, offers the best of most worlds for insurers – it’s single-payer, government-financed insurance, and it has low enrollee costs. So while insurers like to gripe about the individual Obamacare exchanges, they have no issues with the big Medicaid profits that Obamacare helps provide.

Aetna, at least, seemed to see that big picture not long ago, even calling the Obamacare marketplaces “a good investment” in April. What changed? It could be that last month, the Obama administration blocked Aetna’s proposed $37 billion merger with Humana. On Wednesday, the Huffington Post revealed a July letter from Bertolini to the Justice Department in which he said that if the merger (and its bottom-line benefits) didn’t happen, Aetna would pull out of Obamacare’s exchanges.

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[WillowTree]

1. Profits in other areas of their book of business don't really figure into it.

No company continues a line of business where they're losing that kind of money. Not a ship builder or a grocery store chain or a software developer. They stick with what's working and drop what isn't. Considering that they're not nor have they ever purported to be a charitable organization, why would they do otherwise?

[napi21]

2. I think their opting out does have something to do with payback for refusing the merger.

But, there are other reasons...more important reasons. With having to pay all the new claims, they could no longer pay their CEO that BIG salary and bonus! That CEO isn't happy about that! So pull out of the exchanges nt only to punish Obama, but maybe sell enough reg. policies to be able to keep that CEO in the lifestyle to which he's (she's) accustomed.

[Sherman A1]

11. Agreed

It is in my opinion, payback. I hope that folks who are being dropped, will make sure that they get their doctor visits in and fill all their Rx's before the end of the year and take care of themselves as best as they can on Aetna' tab.

[Egnever]

3. Short sighted IMHO

I have no doubt that there were high costs with a lot of the new customers. I would be willing to bet many had gone without insurance for a long time. I would be willing to bet that a large reason there were so many sick was because many took advantage of services that were never available to them before.

Over time I would expect that to normalize as those folks got healthy or healthier and started taking care of themselves. I would also be willing to bet that ten years from now those markets will show little difference from any other market. Maybe it is smart to get out now while costs are high and re enter later but I would think they are missing an opportunity to lock in a large customer base while they have their foot in the door.

Maybe the numbers show me to be a complete idiot though.

[czarjak]

4. Bottom line...

Profits over people. More is never enough.

[burrowowl]

5. Aetna worse than crooks

we need Universal Health Care!

[nikto]

6. Single Payer NOW!!!!!!!!!!!!!!!!!!!!!

[Marcuse]

7. The Public Option will cut out bookies like Aetna.

just like the lotteries and OTB did.

[Astraea]

8. Why should these companies

be allowed to manage and profit from state-funded healthcare like Medicaid and Medicare? In my state there are at least 5 private plans to choose from -- why not cut out the middle man and have the government pay for healthcare directly? Not to mention having to pay for their administration costs.

National healthcare NOW.

[uponit7771]

10. Cause it wouldn't be national health care just the admin of it, the doctors would still be private

... and the doctors along with pharma and the hospital groups take a larger majority of the HC pie.

The bigger problem is to get these 3 groups to accept around half of what they're being paid now to keep cost down.

The other problem is the systems for the "medi's" aren't big enough for the rest of the 300 million people to administer.

There should be a work program to update all of this and only 5% of it should be allowed to be foreign workers...

Conservatives in both parties would never allow for it

[aggiesal]

9. Nothing like socializing the profits ...

ACA should mandate that you can't get subsidies from medicaid with
participating in the ACA Marketplace