You might have seen Mr. Mark Bertolini, CEO, Aetna, announcement the other day that Aetna will “stop offering policies on the exchanges in 11 of the 15 states where it currently operates” due to incurring a loss of “$430 million in its individual policies unit since the 'Obamacare' exchanges opened in January 2014”. "Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool," he said. (1)
I wondered about Mr. Bertolini’s announcement. For some reason I was reminded of how Sgt. Joe Friday* of the long ago TV series Dragnet, would focus on “facts” in order get a handle on “truth”. “Just the fact, ma’am”, I remember him saying.
Here are the facts:
1. Aetna made a boatload of money between April and June of 2016. Both revenue and profits were up considerably over the same period in 2015. Aetna’s operating earnings increased 8.5 percent, from $722.1 million during the second quarter of 2015 to $783.3 million in the second quarter this year. Total revenues for the quarter increased to almost $16 billion.
2. During the first six months of this year, Aetna actually got almost as much revenue from taxpayers via the government’s Medicare and Medicaid programs ($13 billion) as it got from its privately insured customers ($14 billion). In fact, Aetna’s government business is growing while its commercially insured book of business is shrinking.
3. Since Jan 2014 Aetna reported operating profits of $6.7 billion
4. Since March 5, 2009 — the day President Obama kicked off the debate on what would become Obamacare — Aetna’s stock price has increased 631 percent.
5. Aetna revenue growth “was primarily due to higher Health Care premium yields and membership growth in Aetna’s Government business, partly offset by membership declines in Aetna’s Commercial Insured products.”
"So even though Aetna is still hugely profitable, it will stop offering coverage in most Obamacare markets because its bean counters recently noticed what Bertolini described as a spike in “individuals in need of high-cost care.”
Aetna’s not alone. Most of the other for-profit insurers have also been losing private-paying customers for some time but more than making up for that loss from revenue they get from taxpayer-financed government health care programs. (2)
Aetna’s announcement only underscores this American Capitalistic fact: even when the for-profit insurance companies are making billions, they will dump the most vulnerable people in favor of making more bucks. Let’s get the job done in service to our people. It’s way past time to cover everyone under Medicare / Medicaid.
1. Aetna to pull out of most Obamacare exchanges, Tami Luhby, CNN Money, 16 Aug 2016.
2. Cry Me a River, Aetna, Wendell Potter, Moyers & Co., 29 Aug 2016.
*Jack Webb, played the role in the TV series. Later Dan Aykroyd was Sgt. Joe Friday in the movie version.