Judge: Aetna ditched exchanges to 'avoid antitrust scrutiny': 5 things to know

U.S. District Judge John Bates determined Aetna's August decision to exit most of the ACA exchanges where it sold health plans was not solely a business strategy, but was "for the purpose of improving its litigation position," according to the 156-page opinion issued Monday.

Here are five things to know about the decision.

1. Judge Bates ruled Hartford, Conn.-based Aetna's proposed $37 billion acquisition of Louisville, Ky.-based Humana would "substantially lessen competition" in the market for individual Medicare Advantage plans in 364 counties across 21 states and the market for individual plans sold on the public exchanges in 17 counties across three states.

2. Specifically, the judge said Aetna's withdrawal from the public exchanges in the 17 complaint counties was to evade "antitrust scrutiny [and] the Court gives that evidence little weight." He added Aetna and Humana "presented evidence of how unprofitable the public exchanges around the country were, and argued that Aetna withdrew as a business decision. But while that evidence tends to show that Aetna had good business reasons for reducing its exchange footprint across the country, it does not show that Aetna withdrew from these specific counties for business reasons."

3. Judge Bates pointed to evidence showing one market Aetna exited — Florida — was Aetna's third most profitable exchange presence in 2015 and at the start of 2016. The judge also referenced internal emails from Aetna's Florida Market President Christopher Ciano. Mr. Ciano said he couldn't "make sense out of the Florida decision … Never thought we would pull the plug all together. Based on the latest run rate data … we are making money from the on-exchange business."

4. The judge said because Aetna's exit was not based on the insurer's profit motive, it does not demonstrate Aetna's future actions in the Florida exchange markets, where antitrust concerns were highlighted by the Department of Justice. 

5. Aetna warned the DOJ in a July 5 letter it would immediately take action to reduce its 2017 ACA exchange footprint if the DOJ sued to enjoin its acquisition of Humana. On July 21, the DOJ sued to block the deal, and in mid-August Aetna announced its exit, citing $430 million in losses on its individual plans since January 2014.

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