5 years later, the Aetna Saga comes full circle: They're glad they met 'ya again.


Fire up the Wayback Machine, Sherman:

May 12, 2016:

Health Insurer Aetna Inc on Wednesday said it plans to continue its Obamacare health insurance business next year in the 15 states where it now participates, and may expand to a few additional states.

"We have submitted rates in all 15 states where we are participating and have no plans at this point to withdraw from any of them," said company spokesman Walt Cherniak. But he noted that a final determination would hinge on binding agreements being signed with the states in September.

Aetna sells the individual coverage on exchanges created by the Affordable Care Act, also called Obamacare. By also filing proposed rates in several other states, Aetna said it had preserved its options to participate in them as well next year. It declined to identify the potential new markets.

The 15 states where it currently participates are Arizona, Delaware, Florida, Georgia, Illinois, Iowa, Kentucky, Missouri, Nebraska, North Carolina, Ohio, Pennsylvania, South Carolina, Texas and Virginia.

Aetna earlier this year said its Obamacare business had operating losses of about 3 to 4 percent in 2015, with improvements seen in the latter part of the year. It is hoping the business will have a break-even performance in 2016.

July 21st, 2016:

Anthem, Aetna Sued by U.S. Seeking to Block Insurer Mergers

U.S. antitrust enforcers roundly rejected a pair of proposed deals that would consolidate the nation’s five biggest health insurers into three.

The Justice Department on Thursday sued to block two separate tie-ups -- Anthem Inc.’s $48 billion takeover of rival health insurer Cigna Corp. and Aetna Inc.’s $37 billion bid for Humana Inc. -- saying the deals would raise health-care costs and reduce choice for consumers.

"For most Americans, health insurance is not luxury but a necessity," Attorney General Loretta Lynch said in Washington. "Health insurance can mean the difference between life and death. If the big five were to become the big three, not only would the bank accounts of American people suffer, but the American people themselves."

Oh, right. That.

Well, seeing how that's a completely unrelated business matter, I'm sure it won't have any sort of impact on...

August 7, 2016:

In addition, Aetna said its worsening performance on public exchanges has forced the company to rethink its 2017 expansion plans and evaluate all of its individual plans in 15 states where it currently sells Obamacare, company chairman Mark Bertolini said Tuesday. Humana has already said it is pulling off most ACA exchanges for next year. And rival UnitedHealth Group UNH +0.20%, too, is scaling back to three states, leaving Anthem WLP +% and Blue Cross and Blue Shield plans as the main Obamacare providers across the country.

...Bertolini said Aetna is expected to lose more than $300 million this year on ACA business and therefore needs to examine markets across the country. The decision on which markets it will stay in will be made before the end of September when regulators need to know whether the company will be a choice for consumers seeking coverage for 2017.

August 15, 2016:

Aetna to Quit Most Obamacare Markets, Joining Major Rivals

Health insurer Aetna Inc. will stop selling individual Obamacare plans next year in 11 of the 15 states where it had been participating in the program, joining other major insurers who’ve pulled out of the government-run markets in the face of mounting losses.

It will exit markets including North Carolina, Pennsylvania and Florida, and keep selling plans in Iowa, Delaware, Nebraska and Virginia, Aetna said in a statement Monday. In most areas it’s exiting, Aetna will offer individual coverage outside of the program’s exchanges.

Oh. Well, I'm sure that was just a sheer coincidence, right? No doubt Aetna will clear this up with an unequivocal statement to put any speculation to...

From Peter Sullivan of The Hill:

Asked if the DOJ’s actions on the merger had any relation to Monday’s announcement, Aetna spokesman TJ Crawford did not directly say yes or no.

“This is a business decision based on higher than projected medical costs that resulted in a second quarter pre-tax loss of $200 million, which we project will grow to in excess of $300 million by the end of 2016,” he said.

Uh-huh. I see.

August 17, 2016:

Aetna CEO Threatened Obamacare Pullout If Feds Opposed Humana Merger

Give us our merger or we’ll quit Obamacare, the insurer told Justice Department officials in a July letter.

The big health care news this week came from Aetna, which announced on Monday it was dramatically scaling back participation in the Affordable Care Act ― thereby reducing insurer competition and forcing customers scattered across 11 states to find different sources of coverage next year.

Aetna officials said the pullout was necessary because of Obamacare’s problems ― specifically, deep losses the insurer was incurring in the law’s health insurance exchanges.

But the move also was directly related to a Department of Justice decision to block the insurer’s potentially lucrative merger with Humana, according to a letter from Aetna’s CEO obtained by The Huffington Post.

Annnnnd finally, January 23, 2017:

However, there was one other twist on the whole thing which was a bit of a head-scratcher: As David Anderson (aka Richard Mayhew) noted at the time, one of the states Aetna pulled out of was Pennsylvania...even though they appeared to be making a profit there:

One of the states Aetna pulled out of is Pennsylvania. This is odd as a friend of the blog pointed out to me offline. Below Aetna’s rate application memo for the individual market in Pennsylvania. You should look closely at the highlighted segment.

...Aetna was profitable in 2015 in the individual market in Pennsylvania. It is projecting to be profitable in 2017. The filing memo was drafted in late May and submitted to the Pennsylvania regulators in early June. Conditions have not changed enough to make Pennsylvania a money loser in under two months.

I picked up this ball and ran with it a bit, digging up a few additional rate filings for Aetna in Pennylvania, and confirmed that:

...sure enough, they made a profit in Pennsylvania in 2014 and 2015 and were certainly expecting to continue to do so in 2016 and 2017. Yet they're including Pennsylvania among the 11 states they're pulling out of. Why?

There's several reasons given for the judge killing the deal, but this is the one most relevant to this saga:

...Obamacare exchanges played a role, too: Aetna and Humana said there shouldn't be any worries about their individual market plans either since there isn't any overlap. But the judge wasn't buying it. Aetna bailed on many Obamacare markets for 2017, but the judge said that withdrawals were politically motivated to help Aetna's case in the lawsuit — and Aetna could re-enter the exchanges in the future if it wanted.

"Because Aetna's withdrawal from the public exchanges in the 17 complaint counties was to avoid antitrust scrutiny, the court gives that evidence little weight in predicting whether Aetna will continue to compete on the exchanges in the future," the judge wrote. David Anderson, a health policy analyst at Duke University, pointed out this ploy out last August when Aetna dropped its profitable Obamacare plans in Pennsylvania.

(by this point Dave Anderson had stopped using a pseudonym)

But here's the kicker: According to the official court decision (which focuses mostly on Florida, not Pennsylvania) not only was Aetna also making a profit on the Florida ACA exchange, they were only profitable because of their exchange business down there...yet they bailed out of the state anyway.

...Yes, that's right. While it remains true that many of the carriers which participate on the ACA exchanges are indeed losing money in those markets, it now appears that in at least one case, one of the highest-profile insurance companies which bailed out of nearly a dozen states last year to many huge, ugly-sounding headlines did so purely to avoid antitrust scrutiny.

So, how many people did Aetna's little stunt screw over? Well, the only states where I know they were making a decent profit are Pennsylvania and Florida.

In Pennsylvania they had over 31,000 exchange enrollees as of January 1, 2016. This number should have increased by about 15% since the open enrollment period hadn't ended yet, but then dropped somewhat throughout the rest of the year via normal attrition. My guess is that at least 25,000 Pennsylvanians were still enrolled in effectuated policies by the time the 2017 open enrollment period started.

As for Florida, according to their 2016 filing (screen shot below), they had around 36,000 exchange enrollees in 2015 (see below); it's safe to assume this stayed around the same last year, but even if you knock it down a bit that's still a good 30,000 people total.

In other words, Aetna kicked at least 55,000 people off their policies for no acceptable reason whatsoever (remember, this doesn't include any of the other profitable states).

Well, I guess none of that matters anymore, because a couple years after the Aetna/Humana deal was quashed...

November 28, 2018:

CVS Health Completes Acquisition of Aetna, Marking the Start of Transforming the Consumer Health Experience

  • Combined company brings together capabilities of two leading organizations to establish innovative health care model
  • Care delivery will have a local focus that will make a complicated system simpler for all, helping people achieve better health at lower cost
  • Combination expected to generate significant value for shareholders through synergies and revenue-enhancing initiatives

Woonsocket, RI – CVS Health (NYSE: CVS), a company that is leading the transformation of health care, today announced that it has completed its acquisition of Aetna (NYSE: AET), establishing CVS Health as the nation’s premier health innovation company.

OK, so why this trip down memory lane today? Because there's a new development:

Heard on CVS Q4 earnings call this AM: New CVS CEO Karen Lynch said Aetna is planning to reenter the ACA exchanges in 2022.

— Shelby Livingston (@ShelbyJLiv) February 16, 2021

Sure enough, via the Wall St. Journal:

CVS Health Corp. said it would re-enter the Affordable Care Act insurance marketplaces next year, as its major role in Covid-19 testing and vaccination allows it to forge ties to a growing number of consumers.

The pharmacy and insurance giant reported fourth-quarter results that beat Wall Street estimates and offered guidance for 2021 that, at the high end, matched analysts’ expectations. For 2021, CVS expects earnings per share of $6.06 to $6.22. It predicted adjusted earnings per share of $7.39 to $7.55, compared with the FactSet consensus of $7.54.

CVS said it expected that the pandemic would have only an immaterial impact on its 2021 earnings. New CVS Chief Executive, Karen Lynch, the former leader of the company’s Aetna insurance unit, said that the company expected some deferred healthcare use in the first quarter, and then consumers would likely “head back to a normal level of utilization” later in the year.

In morning trading, shares of CVS were down 2% at $72.71.

“In-line numbers, in-line guidance, no major surprises….Everything seems to be moving along solidly,” said Matthew Borsch, an analyst with BMO Capital Markets.

Well. There it is.