Bernie Sanders, Elizabeth Warren grill Aetna about Obamacare exit, call move 'inexplicable'
Aetna, however, said many insurers have been forced to leave the exchanges due to what it called the instability of the marketplace.
Five United States Senate Democrats and Independent Bernie Sanders of Vermont have sent a letter to Aetna Chairman and CEO Mark Bertolini asking him to explain Aetna's withdrawal from many of the company's Obamacare markets and how that decision was tied to the federal decision to block its $37 billion merger with Humana.
"We are particularly troubled that Aetna's decision to leave the ACA exchanges appears to have been motivated by the Justice Department's decision to challenge Aetna's proposed $37 billion merger with Humana ….," they wrote.
The Senators want Aetna to give the costs it will incur due to the Department of Justice's challenge of the merger, and also the price tag if the deal is ultimately blocked.
They asked for a response by September 15.
Aetna has said it would suffer significant unrecoverable costs including the carrying cost of the debt required to finance the deal, as well as a $1 billion breakup fee, the Senators said.
[Also: Aetna, Humana fire back at feds over DOJ attempt to block merger]
"Because the risk of the merger were obvious from the beginning, these actions are both inexplicable and irresponsible," said Democratic Senators Elizabeth Warren, Bernie Sanders, Edward Markey, Sherrod Brown and Bill Nelson.
Aetna , however, said many insurers have been forced to leave the exchanges due to what it called the instability of the marketplace. The company also called out liberal Senators for being politically motivated.
"Singling Aetna out may be politically convenient during election season, but this letter ignores realities and takes the focus away from needed reforms," Aetna said in an emailed response Thursday. "The ACA is not sustainable without bipartisan action that improves access, affordability and quality of care for consumers."
Aetna announced in July it was withdrawing from 11 of the 15 states in which it currently operates Obamacare exchanges after the Department of Justice filed an injunction to block its planned merger with Humana.
The Justice Department also filed an injunction to block Anthem's planned $54 billion takeover of Cigna.
[Also: Letter shows Aetna warned DOJ it would exit Obamacare markets if merger challenged]
The Senators asked Bertolini why Aetna agreed to pay Humana a $1 billion breakup fee should the deal fall through.
"When Aetna agreed to pay this fee, was Aetna aware that it would endanger participation in the ACA exchanges?" they wrote.
By contract, Aetna must pay Humana $1 billion if the deal doesn't go through by the end of the year.
Trial on the merger is set for Dec. 5.
Prior to the decision by the Justice Department, Aetna said it would remain in the public exchanges and even expand its footprint for 2017, the Senators wrote.
During an April 16 investors call, Aetna said the exchange business was a good investment. Growth was happening where Aetna saw a good cost structure, including in Florida, Georgia and North Carolina, they said. As late as May, Aetna said it planned to continue selling plans in all 15 states where it currently operates.
"In none of these statements did Aetna indicate that its continued participation in the exchanges was contingent upon federal government approval of its merger with Humana," they wrote. "But as the Justice Department began to raise questions about the merger, Aetna changed its tune."
Aetna, however, said the issues that drove its decision to leave the exchanges are similar to those of other big insurers.
"We are one of many insurers, large and small, that has been forced to reduce its public exchange participation due to an increasingly unstable marketplace," Aetna said by emailed response. "This isn't a recent development, as more than 40 companies exited certain geographies for the 2016 plan year."
The Senators want to know what criteria Aetna used to determine from which states to withdraw in 2016 and why Aetna chose Florida, Georgia and North Carolina, states in which Aetna said it had a good cost structure.
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According to WLOS in North Carolina, Aetna's decision to leave the Affordable Care Act marketplace in that state leaves just one company left selling plans on the exchanges in the western area, Blue Cross and Blue Shield.
BCBS has said its exchange rates are increasing close to 20 percent in 2017, after a 32 percent increase this year, WLOS reported. BCBS is suing the federal government for more than $150 million, saying the government underpaid them for taking on the risk of the marketplace.
It is among several insurers that say the government owes them money under the risk adjustment program.
Open enrollment begins November 1.
Twitter: @SusanJMorse
