Aetna isn't feeling quite so good about the Affordable Care Act marketplace after all.
The health insurance giant, which is gearing up for a legal battle with the U.S. Department of Justice over its attempts to acquire rival Humana, announced this week that it will not expand into more ACA state marketplaces and that it may soon exit the 15 in which it currently sells plans.
America's third largest insurer projects that it will lose $300 million on its ACA business this year, putting it in similar territory as the other "big five" insurers, all of whom have indicated that they have yet to turn a profit on Obamacare.
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In May, Aetna had projected optimism about its exchange activity, saying that it was committed to the exchanges in which it currently operates and that it was considering expanding into additional ones.
On Tuesday, however, CEO Mark Bertolini said the company definitely would not pursue any type of expansion and indicated there is a good chance it will completely abandon the ACA business.
Aetna's change in tone closely mirrors that of Anthem, another major insurer that is preparing to battle the Obama administration in court over a proposed acquisition. Like Aetna, Anthem had indicated earlier this year that it was committed to the ACA exchange, and that it believed that profits, if not immediate, would come in time.
Last week, days after the Justice Department sued to block both Aetna's acquisition of Humana and Anthem's proposed purchase of Cigna, Anthem announced that it was projecting losses for its ACA plans.
In a somewhat cryptic statement, Anthem CEO Joseph Swedish told The Wall Street Journal that the company would make "accurate business decisions going into 2017 and beyond regarding our continued engagement on a broad scale in the public exchange space."
Aetna and Anthem's departure from the exchange would be a big blow to the ACA, which has already been stung by UnitedHealth's decision to abandon all but three state exchanges next year.
There is an ostensible strategy behind Aetna and Anthem's strikingly similar statements. In past statements expressing optimism about the future of their ACA business, both companies suggested that their planned expansions into new marketplaces was contingent on the approval of their attempted mergers. Now that the Obama administration is targeting the mergers, the companies appear to be showing the administration the consequences.
Both companies have also suggested that they would be willing to sell off some of their assets in order to get the mergers approved.
The several hundred million dollars the companies have lost through Obamacare are a pittance compared to the acquisitions they are seeking, both of which are both tens of billions of dollars. It stands to reason that if they could extract a legal settlement from the Justice Department that allows the mergers to go through, they would be willing to do the Obama administration the important political favor of maintaining a presence in the ACA marketplace, even if it's not terribly profitable
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