An interesting lawsuit was filed in Pennsylvania last week against Aetna Inc., a Connecticut-based insurance company that has been one of the nation’s largest alternate insurance choices for decades. Aetna pulled out of the individual health insurance markets in 11 states claiming that this was a business decision to prevent the company from losing money. It was later revealed that this was false and that the real reason Aetna pulled out was to retaliate against government for opposing its plan to merge with Humana. The original federal district court’s decision that rejected the Aetna/Humana merger included this finding made national news. A month later, Aetna pulled out of 11 state insurance exchanges. Aetna said the move was part of a previously announced strategy but it is widely believed that the pullout strategy was intended to improve the company’s legal leverage for the proposed merger.
Now some of Aetna’s shareholders led by a institutional investor in Pennsylvania have filed suit against the insurance company for not acting in the best interests of the investors. In essence, the investors are saying that the insurance company’s management does not have the right to play politics at the investors’ expense. The civil lawsuit might be stalled while a separate investigation of Aetna’s actions is completed. After the surprise results in Washington DC where Republicans ware unable to real and replace the ACA, it now appears likely that the civil lawsuit against Aetna may lose merit as time goes on.
From the public’s perspective it comes down to the willingness to support the Affordable Care Act or the desire to see ACA fail so that the law can be repealed and replaced. Businesses, just like individuals, fall on both sides of the argument. Businesses, unlike individuals, have a legal obligation to act in the best interests of their investors. Other more recent news of threats by the president to withdraw funding for the insurance markets strengthen Aetna’s position that the withdrawal was a smart business decision for its shareholders. Aetna’s board has requested more time to show that this will, in fact. turn out to be true (even it wasn’t true at the time the company made the decision to withdrawal from the markets).
Meanwhile the insurance coverage of hundreds of thousands of people remains in jeopardy. The majority of Pennsylvanians who shop for health insurance will have only one ACA-approved insurance provider along with a handful of non-ACA-compliant health insurance plans.