A federal choose has dominated that Aetna wasn’t being truthful when the well being insurer mentioned final summer time that its determination to tug out of most Obamacare exchanges was strictly a enterprise determination triggered by mounting losses.
U.S. District Choose John Bates concluded this week that Aetna’s actual motivation for dropping Obamacare protection in a number of states was “particularly to evade judicial scrutiny” over its merger with Humana.
Aetna pulled out of Obamacare exchanges in 11 states final August, together with 17 counties in Florida, Georgia and Missouri the place the Division of Justice argued the merger would wipe out competitors.
That call to retreat from Obamacare got here only a month after the Department of Justice blocked Aetna’s $34 billion merger with Humana on antitrust grounds.
However Bates mentioned this week the DOJ introduced “persuasive help” — together with inside Aetna emails — for the conclusion that Aetna (AET) withdrew from the Obamacare exchanges in these counties “to enhance its litigation place.”
“The Court docket doesn’t credit score the minimal efforts of Aetna executives to assert in any other case,” Bates wrote in a ruling following a trial over the merger.
He added that Aetna’s determination relating to participation within the 2017 exchanges in these counties was “in actual fact manipulated.”
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Aetna had warned the federal government it might must dump then-President Obama’s signature healthcare regulation if the U.S. scuttled its take care of Humana (HUM).
“It is extremely doubtless that we would wish to depart the general public alternate enterprise totally…ought to our deal finally be blocked,” Aetna CEO Mark Bertolini wrote in a letter to the DOJ final July that was obtained by the Huffington Post.
Nonetheless, Bates mentioned it is clear that “Aetna tried to leverage its participation within the alternate for favorable therapy” from regulators.
The choose mentioned there may be “persuasive proof” that when Aetna later withdrew from the 17 counties in query, “it didn’t achieve this for enterprise causes, however as a substitute to comply with by means of on the risk that it made earlier.”
This critique was buried in a 158-page ruling issued by Bates on Monday, through which he blocked Aetna’s merger with Humana attributable to anti-competitive issues.
The ruling offers a giant blow to each firms at a time of nice uncertainty within the well being care trade now that President Donald Trump has talked about rolling again a number of key provisions of Obamacare.
Aetna-Humana is not the one large well being care merger doubtful. The DOJ also sued to block the takeover of Cigna (CI) by Blue Cross Blue Protect chief Anthem (ANTX) for anti-competitive causes.
Aetna declined to touch upon specifics of the opinion, together with the criticism from Bates, as a result of it is nonetheless “reviewing the small print.”
Related: Even as they repeal Obamacare, Republicans still have to fund it
Final summer time, Aetna defined its determination to withdraw from most Obamacare exchanges by saying its particular person insurance policies enterprise had misplaced $430 million for the reason that exchanges opened in January 2014.
Nonetheless, the choose famous that Aetna saved its help for exchanges in money-losing states like Delaware, Iowa and Virginia — however dumped Florida, although that large state was projected to be worthwhile in 2016.
The ruling quoted an e-mail from Christopher Ciano, president of Aetna’s Florida market, to Jonathan Mayhew, head of Aetna’s alternate enterprise, exhibiting how surprised he was by the choice to depart Florida.
“I simply can’t make sense out of the Florida determination. By no means thought we’d pull the plug all collectively,” Ciano wrote, including that Aetna was “getting cash from the on-exchange enterprise.”
Mayhew responded by requesting to debate by cellphone “as a substitute of e-mail.”
Bates mentioned the response from the senior Aetna exec was an instance of Aetna’s “repeated efforts to hide a paper path about this decision-making.”
–CNNMoney’s Tami Luhby contributed to this report
CNNMoney (New York) First revealed January 24, 2017: 12:36 PM ET
