Health insurers threaten Affordable Care Act, patients

Bill Knight column for Thursday, Friday or Saturday, August 25, 26 or 27

Health care affects everybody – as does paying for it, from exams to medicines to hospitalizations.

Increasingly, rural residents may have to “choose” from just one available health-insurance plan, according to studies. The Kaiser Family Foundation – which reports that almost two-thirds of uninsured people in rural areas live in states that haven’t implemented Medicaid expansion – said, “As a result, uninsured rural individuals may have fewer affordable coverage options moving forward.”

Now everyone else may be forced into that situation, too.

One of the country’s biggest health insurance companies last week said it planned to leave most of the areas where it offers policies through exchanges in the Affordable Care Act (ACA).

Aetna is the third big insurer, with Humana and UnitedHealthcare, to threaten to leave the program, Aetna citing financial losses from covering policyholders.

However, that doesn’t seem to correspond with the corporation’s financial reports from Aetna’s first and second quarters. After the former, Aetna CEO Mark Bertolini in April said the company planned to continue to be in the exchanges and that the company was "in a very good place to make this a sustainable program."

And in Aetna’s second-quarter financials, its revenues and profits even exceeded Wall Street expectations. Earnings were up 8.5 percent from the second quarter of 2015 (from $722 million to $783 million) on revenues of almost $16 billion.

Then, a bombshell: “We intend to withdraw all of our 2017 public exchange expansion plans, and are undertaking a complete evaluation of future participation in our current 15-state footprint,” Bertolini said in the corporation’s earnings press release.

“Wait, what?” policyholders and taxpayers might say.

However – ah ha – a connection emerged between that threat and Aetna’s wrangling with the U.S. Department of Justice, which filed a lawsuit seeking to prevent Aetna from buying Humana because of concerns that such consolidation would mean less competition and higher costs for customers.

“They would leave much of the multitrillion health insurance industry in the hands of just three mammoth companies, restricting competition in key markets,” said U.S. Attorney General Loretta Lynch, whose DoJ also seeks to prevent Anthem from buying Cigna.

“If the big five were to become the big three, not only would the bank accounts of the American people suffer, but the American people themselves,” she added.

In response to a DoJ letter inquiring into possible financial effects of blocking the merger, Bertolini replied that if the company lost the lawsuit and the deal was blocked, Aetna would drop its remaining Affordable Care Act business and leave the public exchanges entirely, according to correspondence made public by Huffington Post journalists.

“Our analysis to date makes clear that if the deal were challenged and/or blocked we would need to take immediate actions to mitigate public exchange and ACA small group losses,” Bertolini wrote. “Specifically, if the DoJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint.”

The Affordable Care Act is costing insurers more money, because they’re prohibited from excluding people with pre-existing conditions and also now have customers who formerly couldn’t afford to be covered at all. So insurers have to spend more of the premium dollars they collect, invest and build up as substantial assets.

But the companies are still making money. A lot of it.

For instance, Aetna’s share price on Monday reached $121.24. The corporation’s share price the day the ACA was enacted (March 23, 2010) was $34.73. So its stock is 3.5 times more valuable since the law went into effect.

But that’s not enough, said one industry insider.

“Health insurers – more specifically, the big for-profit health insurers that want to get even bigger through two pending mega-mergers – once again are demonstrating that nothing – absolutely nothing – is more important to them than making their rich shareholders even richer,” said Wendell Potter, a former health-insurance executive and author of “Nation on The Take: How Big Money Corrupts Our Democracy and What We Can Do About It.”

An advocate for everyday Americans also expressed outrage.

“We cannot allow well-funded special interests to dictate this most basic of services,” says Linda Newman, president of the Alabama-based Women Involved in Farm Economics (WIFE). “Treatment based on sound advice and consultation from one’s local medical provider must be the guidance behind any treatment plan, not profit margins. Our forefathers would not have allowed for-profit corporations to take advantage of our communities’ access to health care and compromise a basic right of all Americans.”

[PICTURED: Photo by occasionalplanet.org.]