4 ms·

Am I misreading this, or are they forgoing profit purely out of spite? Or I guess the idea is they could make more profit in the long run if they generate enoug

Am I misreading this, or are they forgoing profit purely out of spite? Or I guess the idea is they could make more profit in the long run if they generate enough bad publicity for the ACA. These quotes almost seem too on the nose to be real: > “I just can’t make sense out of the Florida dec[ision],” the executive, Christopher Ciano, wrote to Jonathan Mayhew, the head of Aetna’s national exchange business. “Based on the latest run rate data . . . we are making money from the on-exchange business. Was Florida’s performance ever debated?” Mayhew told him to discuss the matter by phone, not email, “to avoid leaving a paper trail,” [the judge] found.

marcell 10y ago
Not quite. Based on the article, they threatened to withdraw if the DoJ did not support their proposed merger with Humana. The DoJ did not support it, so they followed through on their earlier threat. So it's not spite, but part of a negotiating tactic.
gleb 10y ago
ACA was designed to drive consolidation. Because large companies are easier for the government to control. Source - ACA author: http://www.wsj.com/articles/i-was-wrong-about-obamacare-1469997311 http://www.wsj.com/articles/i-was-wrong-about-obamacare-1469... (How I Was Wrong About ObamaCare: The law’s drafters wanted consolidation) Which why, all of a sudden, all the hospitals are buying each other, and insurance companies are buying each other. It seems Aetna felt that the government didn't live up to its side of the bargain.
- burkaman 10y ago
  Ok, but on its own that doesn't make sense as a business decision. Assuming they are profit-driven businesspeople, they either they thought their best option was to try and sabotage the ACA, or they really thought this would work as a negotiation tactic, which seems absurd.
  - gleb 10y ago
    Why does it seem absurd as a negotiation tactic? They use what leverage they have against the government.
    - burkaman 10y ago
      I don't know, does this kind of thing usually work? I don't really know anything about this, but it just seems sort of obvious that Aetna is in a much weaker position than the US government and can't possibly strongarm them that easily. But I guess if the prospect of making the ACA look like a failure is part of the leverage then it makes more sense.
- deleted 10y ago
  [deleted]
runamok 10y ago
Also they pulled out of areas with little competition to prevent the argument against their Humana merger being due to inadequate competition.
elipsey 10y ago
Aetna hoped to forego smaller profits from these exchanges to access larger profits with the acquisition of Humana. By withdrawing from those markets where Humana was competing with Aetna, Aetna could then claim that the merger would not reduce competition between insurance providers. Also, article claims that participation in ACA exchanges was privately used as a bargaining chip to pressure the DOJ into allowing the merger. From article: "Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger." — U.S. District Judge John D. Bates
- a3n 10y ago
  "Aetna could then claim that the merger would not reduce competition between insurance providers." But the merger did reduce competition, because of Aetna's withdrawal to (they thought) enable that very merger. "We'll just kill your chickens before we let our chicken hound run free. See? Our hound won't kill your chickens." "The cynicism ... the cynicism ..."
  - elipsey 10y ago
    I didn't mean to evaluate any particular claim, only to use my modest powers of reading comprehension to helpfully summarize the article :)
    - a3n 10y ago
      And I understood your comment exactly that way. I actually tried to think of how to make that obvious, but couldn't in the time I gave myself. Have a good day, citizen. :)
a3n 10y ago
"Forgoing" profit now, in pursuit of greater profit when there's less competition after the merger. Always follow the money.
dragonwriter 10y ago
> Am I misreading this, or are they forgoing profit purely out of spite? Not spite: it's sacrificing short-term profit to help create a political context in which they expect more favorable general policy -- the entire idea was that if the Democratic administration wouldn't give them favorable anti-trustanalysis treatment, they'd do what they could to make the ACA look like a failure, knowing it would be a major election issue. Presumably, they expected a Republic administration to be friendlier, either for ideological reasons, or gratitude, or because Aetna successfully flexing it's political muscles would have proven that they must be deferred to (or a mix of all three.)
Lagged2Death 10y ago
Am I misreading this, or are they forgoing profit purely out of spite? I love how all the responses here are all "No no no, it's not spite, it's perfectly valid extortion. Well what else could they do?"

marcell 10y ago

Not quite. Based on the article, they threatened to withdraw if the DoJ did not support their proposed merger with Humana. The DoJ did not support it, so they followed through on their earlier threat. So it's not spite, but part of a negotiating tactic.

gleb 10y ago

ACA was designed to drive consolidation. Because large companies are easier for the government to control. Source - ACA author: http://www.wsj.com/articles/i-was-wrong-about-obamacare-1469997311 http://www.wsj.com/articles/i-was-wrong-about-obamacare-1469... (How I Was Wrong About ObamaCare: The law’s drafters wanted consolidation) Which why, all of a sudden, all the hospitals are buying each other, and insurance companies are buying each other. It seems Aetna felt that the government didn't live up to its side of the bargain.

burkaman 10y ago
Ok, but on its own that doesn't make sense as a business decision. Assuming they are profit-driven businesspeople, they either they thought their best option was to try and sabotage the ACA, or they really thought this would work as a negotiation tactic, which seems absurd.
- gleb 10y ago
  Why does it seem absurd as a negotiation tactic? They use what leverage they have against the government.
  - burkaman 10y ago
    I don't know, does this kind of thing usually work? I don't really know anything about this, but it just seems sort of obvious that Aetna is in a much weaker position than the US government and can't possibly strongarm them that easily. But I guess if the prospect of making the ACA look like a failure is part of the leverage then it makes more sense.
deleted 10y ago
[deleted]

runamok 10y ago

Also they pulled out of areas with little competition to prevent the argument against their Humana merger being due to inadequate competition.

elipsey 10y ago

Aetna hoped to forego smaller profits from these exchanges to access larger profits with the acquisition of Humana. By withdrawing from those markets where Humana was competing with Aetna, Aetna could then claim that the merger would not reduce competition between insurance providers. Also, article claims that participation in ACA exchanges was privately used as a bargaining chip to pressure the DOJ into allowing the merger. From article: "Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger." — U.S. District Judge John D. Bates

a3n 10y ago
"Aetna could then claim that the merger would not reduce competition between insurance providers." But the merger did reduce competition, because of Aetna's withdrawal to (they thought) enable that very merger. "We'll just kill your chickens before we let our chicken hound run free. See? Our hound won't kill your chickens." "The cynicism ... the cynicism ..."
- elipsey 10y ago
  I didn't mean to evaluate any particular claim, only to use my modest powers of reading comprehension to helpfully summarize the article :)
  - a3n 10y ago
    And I understood your comment exactly that way. I actually tried to think of how to make that obvious, but couldn't in the time I gave myself. Have a good day, citizen. :)

a3n 10y ago

"Forgoing" profit now, in pursuit of greater profit when there's less competition after the merger. Always follow the money.

dragonwriter 10y ago

> Am I misreading this, or are they forgoing profit purely out of spite? Not spite: it's sacrificing short-term profit to help create a political context in which they expect more favorable general policy -- the entire idea was that if the Democratic administration wouldn't give them favorable anti-trustanalysis treatment, they'd do what they could to make the ACA look like a failure, knowing it would be a major election issue. Presumably, they expected a Republic administration to be friendlier, either for ideological reasons, or gratitude, or because Aetna successfully flexing it's political muscles would have proven that they must be deferred to (or a mix of all three.)

Lagged2Death 10y ago

Am I misreading this, or are they forgoing profit purely out of spite? I love how all the responses here are all "No no no, it's not spite, it's perfectly valid extortion. Well what else could they do?"