Jan. 24 (UPI) -- When U.S. insurance giant Aetna bailed on several Affordable Care Act healthcare exchanges last year, it did so because President Barack Obama's administration filed a lawsuit to block its megamerger with Humana, a federal judge claimed this week.
In his decision to block the proposed $37 billion merger on Monday, U.S. District Judge John D. Bates said the company was not truthful when it claimed last summer it was leaving the exchanges purely for business reasons.
In August, Aetna said it decided to reduce 2017 ACA participation by 536 counties in 11 states, including Georgia, Florida and Missouri, due to heavy fiscal losses -- more than $400 million since it began participating in the exchanges in 2014.
"Following a thorough business review ... we have decided to reduce our individual public exchange presence in 2017," Aetna CEO Mark Bertolini said at the time.
Bates, though, concluded that the company "manipulated" its reason for fleeing the exchanges, and did so primarily "to improve its litigation position" in the Justice Department lawsuit.
The government sought to block the deal over fears it would severely hamper competition, and particularly harm seniors who shop for private Medicare coverage. After a two-week trial, Bates agreed with federal prosecutors.
"Aetna tried to leverage its participation in the exchange for favorable [litigation] treatment," the judge wrote.
To support his opinion, Bates noted that some of the areas Aetna left were expected to be profitable in 2017 -- and states where it remained, like Iowa and Virginia, were anticipated money-losers. He also cited internal emails from Aetna that suggested its decision to leave ACA exchanges was largely based on the government's attempt to block the Humana deal.
"If the DOJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint," Bertolini wrote in a letter to the Justice Department. "We believe it is very likely that we would need to leave the public exchange business entirely."
Aetna's announcement that it was leaving ACA markets in 11 states came about a month after the Obama administration filed to block the merger.
"[Aetna] did not [leave] for business reasons, but instead to follow through on the threat," Bates said, noting another message from Bertolini to a former colleague that said Obama's government had "no loyalty" and a "very thin skin."
"Our feeling was that we were doing good things for the administration and the administration is suing us," the chief executive testified last fall, explaining the remarks.
"This evidence shows that Aetna and its CEO, Bertolini, viewed participation on the exchanges as closely connected to DOJ's attempt to block the merger," Bates continued. "Aetna was willing to offer to expand its participation in the exchanges if DOJ did not block the merger, or conversely, was willing to threaten to limit its participation in the exchanges if DOJ did."
Aetna, which may appeal Bates' decision, said it is still reviewing his opinion.
The Aetna-Humana merger isn't the only one facing government scrutiny. The Justice Department is also trying to block a similar deal between Cigna and Anthem, but that case has yet to be decided.
It remains to be seen whether the cases will be affected by President Donald Trump's new administration.
