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Ugly. Aetna's decision to pull out of marketplaces where it was making a profit in order to strengthen its hand in its then-ongoing antitrust suit may be coming back to haunt it. Again.
Aetna slapped with shareholder lawsuit over ACA exchange exits
Aetna slapped with shareholder lawsuit over ACA exchange exits
Aetna's 2016 decision to drastically scale back its participation on the Affordable Care Act's insurance exchanges continues to haunt the insurer almost a year later.
Hartford, Conn.-based Aetna was hit with a shareholder lawsuit this week that accuses its board of directors of breaching its fiduciary duties to the company and its shareholders by making false statements about the insurer's reasons for pulling out of exchanges in 11 states.
The Allegheny County Employees' Retirement Fund—an Aetna stockholder—alleges that Aetna's retreat from the exchanges was not a "business decision," as the insurer claimed, but a move to better its chances of closing a $37 billion merger with Humana that ultimately failed.
The complaint, filed in Pennsylvania state court, says that Aetna's alleged conduct, which came to light during its legal battle to acquire Humana, has caused the company financial harm and damaged its reputation. Moreover, the lawsuit claims that Aetna chose to forgo profits "simply to make good on their wrongful threats to the government."
"The real reason that Aetna withdrew from the exchanges was to retaliate against the government for its attempt to block the Aetna-Humana merger and, moreover, the public exchanges in multiple states from which Aetna withdrew were actually profitable for the company," the complaint said.
U.S. District Judge John D. Bates, who blocked Aetna's merger with Humana in January, first made the accusation that Aetna used its participation on the exchanges as a form of leverage to close its merger.
He claimed in his written opinion that Aetna leadership made good on repeated threats to the U.S. Justice Department and then-HHS Secretary Sylvia Mathews Burwell to curtail its participation in the exchanges if the merger were blocked. The shareholder lawsuit filed this week cited Bates' opinion as proof that Aetna misrepresented its reasons for exiting the ACA marketplaces.