A few days ago, Bloomberg (a news service geared toward businesses) ran a piece entitled ‘Aetna CEO: Obamacare in “Death Spiral”‘ recapping a video interview Aetna CEO Mark Bertolini gave to the Wall Street Journal.
Let’s take a look at this piece:
“Aetna Inc. Chief Executive Officer Mark Bertolini escalated his criticism of the Affordable Care Act, saying Obamacare’s markets are nearing failure as premiums climb and healthier individuals drop out.
“It is in a death spiral,” Bertolini said in a video interview with the Wall Street Journal that aired Wednesday on the newspaper’s website. He predicted that more insurers will drop out of the market for 2018, following Humana Inc.’s decision to quit Obamacare entirely for next year.”
So the CEO of a health insurer is sensationally quoted as saying Obamacare is in a death spiral because insurers are pulling out.
If you didn’t look closely at this piece, you might paste it on your social feed and pretend you know what you’re talking about when you talk about health insurance.
The head of a profitable company saying that the laws that regulate him suck… that’s not news. That’s like smelters complaining that the EPA is ruining them with useless regulations so they can’t foul the air.
A casual reader mistakes this headline as Aetna saying they’re going under as an insurer thanks to health care legislation.
In fact, Aetna continues to be hugely profitable. As this piece from Forbes tells us, quoting a shareholder call from the above ‘death spiral’ dude, Aetna’s net income rose a respectable 8% last year — that’s more of a raise than YOU got —
“Aetna’s net income rose nearly 8% to $603.9 million, or $1.70 per share, in the third quarter compared to $560.1 million, or $1.59 per share, in the third quarter of 2015, the company said.”
Bertolini “predicted that more insurers will drop out of the market for 2018, following Humana Inc.’s decision to quit Obamacare entirely for next year.”
Yet from Forbes‘s reporting from October, we learn that
“Other insurers like Humana have seen their Medicare star ratings drop, which analysts say will hurt its enrollment. Aetna executives said they were disappointed in the news about Humana’s deteriorating Medicare star ratings but remain committed to the acquisition of the Louisville-based insurer.”
So… Humana was getting bad marks, thus fewer customers, so it decided to exit the fair playing field, and Bertolini is blaming that on… Obama?
Aetna’s net income — not gross, NET — was $2.3 billion dollars in 2016. “The company cut its footprint to four states for this year, from 15, after losing about $450 million on sales of ACA plans last year.” So it lost a little bit on marketplace and gained a TON of money with all the other provisions of the Affordable Care Act.
Humana’s net income in the third QUARTER 2016 — “totaled $450 billion in the third quarter compared with $314 million in the same period last year. Its revenue increased slightly at 2.5% to $13.69 billion from $13.36 in the same quarter a year ago.”
The insurers themselves aren’t in a death spiral.