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.
My wee bit of cynicism bears fruit. Aetna is trying to logroll an anti-competetive merger with on-Exchange political consequences. If it works for Aetna/Humana it burns a bridge to get the merger, and if it fails, it puts Aetna on the shitlist of any Democratic administration. That is a very interesting strategy when it is highly likely that there will be another Democratic administration…
So in all years Aetna’s individual market operations in Pennsylvania were either profitable or projected to be profitable. Something stinks worse than a wrestling team’s locker room after two-a-days.
USA Today on Sunday afternoon:
When Aetna announced in August that it was leaving the exchanges in 11 of the 15 states it sells in for 2017, it said it had a pretax loss of $200 million on its individual insurance plans in the second quarter of this year and total pretax losses of more than $430 million since January 2014 on its individual insurance plans. Nearly all of these policies are sold on the ACA exchanges. At the time, CEO Mark Bertolini said the move would “limit our financial exposure moving forward.”
But Aetna made nearly $12 million on individual ACA plans in Texas and more than $8 million in Pennsylvania, according to financial filings with state regulators, and is exiting the Healthcare.gov exchange in both states anyway. Asked to comment on decisions to leave states where it was making money, Aetna spokesman T.J. Crawford said, “We don’t discuss performance at the state level.”
Nice to know that I am occasionally cynical enough.
Gindy51
They lie, same shit different day.
Yutsano
Taking bets on that merger going back on once ACA is gutted.
John Revolta
Oooops! Pardon me- I assumed this was the Ben Carson thread. Sorry!
Roger Moore
@Yutsano:
They don’t have to wait that long. As soon as Trump’s people are in charge of anti-trust (non)enforcement, mergers will become very common for any company willing to cough up sufficient graft.
LongHairedWeirdo
The interesting thing is whether or not this was something explicitly planned to occur in 2016 (i.e.: a Presidential election year).
BGinCHI
Aetna lied. People died.
germy
Who was the first visionary who decided to merge the Healing Arts with the Profit Motive?
His name has not come down to us through the centuries, but his vision lives on.
napoleon
. . . and a good part of our fellow citizens like to hold up business people as some kind of moral exemplars. This isn’t even some shady fringe business, like a internet vitamin supplement seller who operates out of his house.
schrodinger's cat
Capitalists are trying to prove that Marx was right after all. His solution to the problem was flawed but his analysis of what was wrong was spot on.
Comrade Scrutinizer
@schrodinger’s cat: Or Lenin: “The Capitalists will sell us the rope with which we will hang them.”
EBT
Ding Dong McCrory concedes! http://www.wsoctv.com/news/north-carolina/north-carolina-elections-board-meets-on-bladen-ballots-probe_/473166324
rikyrah
you were on the money, Mayhew
Chris
@schrodinger’s cat:
I always thought Ayn Rand, the patron saint of that crop of “capitalists,” came off like somebody who’d attentively read her Marx and Lenin and decided that the capitalists were the good guys of the story. Her heroes are such cartoonishly awful people that most movie writers would reject them even as villains. They actually resemble something a Soviet propagandist would try to come up with as the image of the West.
Which actually fits very well, since she hailed from the USSR and that was her frame of reference. In that light, turns out that “Atlas Shrugged” is something between the Soviet version of “Wicked” and the Soviet version of that kid who becomes a Satanist to rebel against his Christian parents. And now we’ve got an entire society trying to emulate that kid. God help us.
Mnemosyne
This is pretty much how the California electricity “crisis” was created: PG & E took all of the profits they made in the state, transferred them to other subsidiaries, and then whined that they had to raise electricity prices because they were almost bankrupt. Rinse and repeat.
Paul W.
Hi Richard, I’m having trouble understanding why they would leave a profitable market? Maybe my coffee high is wearing off, and it is simpler than I am thinking – they just want an excuse for a merger, and then had hoped to re-enter this or future markets under more favorable (now proven true because of Trump win) conditions?
joel hanes
@Paul W.:
I’m having trouble understanding why they would leave a profitable market?
Political vengeance/ratfucking.
That market was much more profitable before ACA.
They can increase the chance that ACA will fail and they will again be allowed to insure in a more profitable, worse-for-consumers way if they leave the market.
So they left some profits on the table in a maneuver intended to destroy the regulation that makes their product better for their customers, but somewhat less profitable for themselves.
pace R. Mayhew, who seems to be a stand-up dude, but the profit incentives in for-profit health insurance are so completely perverse that the business is inherently immoral in the absence of strict regulation.
Jacel
When you called this one, it sounded convincing to me at the time.
By the way, someone on Facebook linked to an unusually clear explanation of the ACA, and a reminder of what the system was like before that reform.
Here.
Rare to see another writer (in Alabama) rise to Richard’s level of clarity and accuracy (as far as I can tell) writing about this subject.
RaflW
Aetna spokesman T.J. Crawford said, “We don’t discuss performance at the state level.”
Of course you do. You just discuss it over drinks with healtcare lobbyists who have the ear of Speaker Ryan.
The next few years will be very high stakes. Right now the GOP and the insurance industry thinks they will somehow win this thing. But Ryan was out there just this morning saying they will maintain the 20 million covered. Which is unpossible, but he said it and the wayback machine needs to not erase it.
Every other major industrialized nation has something akin to single payer. The GOP can delay but I don’t think they can hold it off for ever. They played ACA repeal as an electoral game, but now they will own all the terrible consequences of fucking it up.