 (AP Photo/Jessica Hill, File) By Carolyn Y. Johnson Aetna announced it would pull out of most of the state exchanges where it sold health insurance under the Affordable Care Act last August, citing financial losses. But a U.S. District Court judge who rejected the company's proposed merger with Humana on Monday revealed in his opinion that profitability wasn't the only concern driving the company's decision -- Aetna also exited several markets as part of an effort to "improve its litigation position." U.S. District Court Judge John D. Bates wrote that Aetna, pushing for a $37 billion merger with Humana since summer of 2015, decided to leave 17 counties in three states in order to improve the likelihood that the deal would be approved -- including one where the business was doing well. Florida was the company's third most-profitable exchange market in 2015 and the beginning of 2016. "I just can't make sense out of the Florida decision," Christopher Ciano, Aetna's Florida market president wrote in an email quoted in the opinion. "Never thought we would pull the plug all together. [sic] Based on the latest run rate data ... we are making money from the on-exchange business." The federal court decision hinged largely on an argument that the proposed merger between Aetna and Humana would substantially decrease competition in the Medicare Advantage market in 364 counties, where private insurers provide Medicare benefits. But it also included the politically tempestuous issue of competition on the exchanges, which are a linchpin of the Affordable Care Act, also known as Obamacare. The exchanges are state and federally run marketplaces where insurers sell plans to people who do not have employer-based insurance. When Aetna announced last summer that it was losing money in the health insurance exchanges and would exit most of them for 2017, the announcement helped spark a national debate about the sustainability of the Affordable Care Act's exchanges. The opinion provides a rare glimpse into the politics behind Aetna's participation in the exchanges, revealing what executives said in e-mails and in depositions. It also shows that competition with Humana appeared to be working in Florida to lower prices for consumers.
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