there was some apparent badnews for obamacare earlier today when insurance giant aetnaannounced they would be pulling out of many of the stateexchanges that currently help to fund and run obamacare and ina long-term sense are critical to the long-term viability. butwhy are they pulling out? but first, the numbers. the insureris offering plans in 15 states
this year, it will offercoverage in four states next year, also cutting in half thecounties it will be doing coverage in. they've announcedwhy they've had to pull out of all the states, the spokesmanfor aetna says -- so if you just listen toaetna, they are saying it is not financially feasible to continuedoing this. blah, blah. turns
out that is not the whole story,because the huffington post filed a freedom of informationrequest and they found a letter that the ceo of aetna sent tothe justice department last year. this is a big section ofthe letter but we will read it in full because it explainsexactly what they're thinking was, what their plan was, andhow they are being deceptive right now. feel free to jump in,obviously.
this is from the letter -- speaking here about apossible merger with humana, another large insurance company-- i think anyone reading that,and the huffington post reporters agree, that is athreat to the justice department to not stop themerger. that is not unclear, in facti'm surprised they wrote it out that plainly, where they saylook, you want us to be part of
the markets for obamacare so ithas a better chance of succeeding? approve my mergerand i will be a bigger part of the market, if you don't approvemy merger, i won't. in fact i'll start to withdraw from it. andthey will know that if they start withdrawing, republicanswill use that as a weapon against obamacare and say, doyou see that? obamacare isn't working.
that is why aetna andthe others are forced to withdraw from it. when inreality it was a bargaining chip for aetna. the reality could beboth, they might have been losing money, but they wouldmake so much money from the merger that they are willing towithstand that loss, or they are making a little bit of moneyfrom the affordable care act but they think it is more valuableto us as a bargaining chip to
get that merger. because by theway, if you are wondering why they are so upset with themerger, of course it might lead to more profits throughsynergies, it might, but what it will really lead to ismuch bigger payouts for the executive team, and that is whatthey care about the most. exactly. just a couple ofweeks after that letter was sent the justice department startedthe process that stopped the
merger, that is why you see thempulling out, even further than the implied in this threat, theyare going down to fewer states, but the merger would result inmassive bonuses for the executives, it would alsoprovide them -- there already are in many markets oneinsurance provider that calls the shots, all the way fromdoctors to blood labs and everything. if you do thesesorts of mergers you take away even more of the littleremaining competition, you give
yourself even more bargainingpower. that ultimately is what they want. it might be that theyare thinking about long-term profits as opposed toshort-term, they probably could continue to make money becausethere are other letters out there implying in speaking toinvestors and shareholders that they are doing just fine, andthey are manipulating the numbers to imply losses thatdon't exist.
but they could think that if we continue theway we are going now we will make some money, but if insteadwe pull out we know the republicans will continue to tryto take down obamacare, if that actually happened then we wouldonce again have free reign to do whatever we want. they might beplaying the long game. this is the moment where isay, i told you. of course we
needed the public option,because what, we are going to be at the mercy of privatecompanies, and if private companies decide i'm going tomake bigger money elsewhere that we are all screwed and theaffordable care act is going to work and we are back to the messwe were in? you wouldn't have this problem if you had a publicoption. aetna, you want to pull out?
go ahead and piss off, morepeople will use the public option, which likely would bemore affordable anyway given the history of the costs of medicareversus private insurance, but we don't have a public option, andnow republicans control the senate and the house socertainly under obama we have emotional chance of getting it. if we retake the senate for the democrats and hillary clintonwins, she claims she will fight for the public option, butlikely the republicans would
still have the house and that isa hell of a fight. or we could have pushed for the publicoption when democrats had an overwhelming majority, had afilibuster proof senate, they had the house, the presidency,they had everything, but they chose half a loaf. so enjoy your half a loaf, wetold you you would be at the mercy of private insurance, andthat is exactly where you are.