Aetna, one of the largest healthcare corporations in America, has threatened to drop out of Obamacare.
In July, the corporation sent a letter to the Justice Department stating it plans to roll back much if not all of its Obamacare business if a merger with rival Humana is not approved. Aetna had announced it would acquire the company for $37,000,000,000 in cash and stock.
“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,” Aetna CEO Mark Bertolini said in a letter dated July 5. The letter arrived more than two weeks before the DOJ decided to oppose the merger.
The Huffington Post obtained the letter through a Freedom of Information Act request.
“Specifically, if the DOJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint …. [I]nstead of expanding to 20 states next year, we would reduce our presence to no more than 10 states,” Bertolini continued.
The pullout underscores the fact large corporate health providers are losing money by participating in Obamacare.
“Unless the exchanges get a rapid infusion of healthier customers who pay substantial premiums without using much care, insurers are going to keep pulling out of the areas where they are losing money. Or at the very least, they will demand benefits from the government to make it worth their while to stay,” Bloomberg reported on Tuesday.
According to a McKinsey & Company report issued in February, healthcare insurers lost money in 41 states in individual markets, including Obamacare marketplaces.
Bertolini, however, told investors in April the Obamacare mandate, which forces consumers to purchase expensive insurance or face fines imposed by the Internal Revenue Service, represents a cost-effective way to acquire new customers.
If Obamacare continues in its present form and insurance companies continue to lose money and pull out of marketplaces, the federal government will provide a huge infusion of taxpayer cash to float the system.
“While the costs of providing health care insurance are beginning to skyrocket because of Obamacare, insurance company executives are sleeping very soundly,” writes Joe Salerno of the Mises Institute. “A respected consultant to health insurance companies, Robert Laszewski, reveals that there are two obscure provisions in Obamacare that guarantee that insurance companies will be subsidized and bailed out by Amercian taxpayers. Indeed the Congressional Budget Office estimates that $1.071 trillion will be coercively transferred from taxpayers to big insurance companies over the next decade.”
In the meantime, Aetna and other insurance corporations will use the failure of Obamacare as leverage to further consolidate and monopolize the industry.