Aetna Builds Empire: One Denial at A Time

By Donna Smith –

It’s a business. It’s big business, and it’s all about the money. When plans for Aetna to purchase Coventry Health for $5.7 billion surfaced this week, all I could think about is where people like me – Aetna’s insured – figure in the business models. I’m not a patient in their calculations; I’m a medical loss. And it just happens to be a deadly serious business.

So, in all the gobbledygook of business economics, the articles announcing the big Aetna buys Coventry deal, and foreshadowing of the impact on Aetna’s bottom line, no one writes about the forbidden topic – what about the patients? What will Aetna do to make sure that other costs – like medical loss ratios – are kept in check while still abiding by federal regulations under the Patient Protection and Affordable Care Act (PPACA)?

How will the company keep its profits soaring and lower a leverage rate that this article says will rise in the wake of the Coventry Health deal?

From the article: “Aetna Inc. (AET)’s $5.7 billion purchase of Coventry Health Care Inc. (CVH) will take the insurer from about the bottom to the top of leverage among its peers as it seeks to cut $400 million of costs…

“…Chief Executive Officer Mark Bertolini has pledged to trim leverage, the purchase’s profitability depends on cuts to management and technology spending that may be difficult to achieve, according to CreditSights Inc. The three major credit- ratings firms lowered their outlooks for the Hartford, Connecticut-based insurer after it announced the deal Aug. 20 and said it would take on $2.5 billion of debt to finance it.”

Already, Aetna and other major insurers have been creative in finding ways to classify wellness programs – like the Aetna Connections program – as part of the medical loss expense. Disease management programs as well as some nurse hotlines provided by insurers were quickly reclassified as medical expenses following the ACA’s imposition of medical loss ratio requirements. Those reclassifications often mean the actual healthcare claims – for medications, services and treatment provided by physicians and other healthcare providers – may be denied more frequently. If the money can be kept “in house” by staffing an insurance company run disease management program or nurses hotline, fewer checks need to be sent outside the company. Profits are protected, and profits are enhanced.

Aetna’s willingness to leverage and to “risk” so much in order to close the Coventry deal tells us much about the profits they expect to gain from it: “In all, Coventry will add more than 5 million customers to the 26.7 million already on medical and prescription drug plans with Aetna, according to the companies’ quarterly reports.” And the company is especially interested in gaining the Medicaid and Medicare (government paid programs) business. Again, that’s cold, hard cash from outside the company.

So, in the short term, how does Aetna shore up the bottom line for investors? How about denying some claims for medications? Over the past three months, all three of the new medications my doctors ordered to help me with serious medical issues were initially denied. One denial was overturned last week on appeal, but two still remain outstanding. That’s a saving to Aetna of about $400 each month. And how does Aetna plan to cover the $2.5 billion in new debt they’ll take out to close the new business deal? As one dear friend of mine said to me recently, “One denial at a time.” It all adds up.

Hmmm, let’s do that math. Aetna could deny just $400 for just a quarter of its 26.7 million current “customers,” sign them up for $400 worth of disease management program support, and end up paying off that debt in no time at all as they’d retain far more of their premium dollars in house rather than paying those dollars out. $400 in profit times 6.5 million patients denied adds up to pay off that $2.5 billion debt.

In the books it would look like they were fully compliant with the medical loss ratios required in the ACA. But in the lives of patients, the pain and suffering could tell a much different story. I know it does in mine. That $400 denial causes me not just gut pain but consequences in my life that are far reaching beyond what needs to be listed here.

If you think your for-profit insurance company is very different from mine, think again. But it’s sure deceptive, isn’t it, when just a few people have to be really hurt to allow for such massive profits. It’s a business, folks. And until we finally decide a Medicare for all for life system would better serve us all, the deceptions will grow ever more complex and deadly.


  1. Paul Spencer on August 27, 2012 at 3:57 pm

    Just when are these unjust, manipulative maneauvers by health care insurance companies going to be flagged by the US government overseers? Or, by the Better Business Bureau?

  2. Robert S on August 27, 2012 at 4:25 pm

    Aetna is not alone. ALL private insurance companies have to make a profit, so there is a built-in conflict of interest. Private insurance companies provide no service whatsoever. They are parasites that interfere with medical treatment, reducing benefits in order to fund their expenses — including swollen executive salaries. We need Universal Healthcare — a medical plan for all our citizens funded by our taxes. It will take the financial burden off corporations, perhaps reducing their need to outsource jobs, and eliminate employment as the criteria for eligibility. Medical care should be a benefit of citizenship.

  3. Rita Walpole Ague on August 27, 2012 at 5:19 pm

    A former Aetna employee (who shall remain nameless) opened up to me, in utter disgust after I’d told him/her about being denied payment by Aetna for a doctor ordered biopsey to check for breast cancer (thank God, not cancer, as the biopsey procedure determined.

    The former employee explained that Aetna did such turndowns and denial of payment on a random, risk management basis, with computers doing the random selections. I at once went into legal mode, and wrote that this violated my conditions of coverage, and I would see them in court. Suddenly, no big suprise, given what I’d been told, Aetna did a reversal and paid my bill.

    Lots of strong regs. needed and needed to be enforced (i.e. including mandatory sentencing) these ‘rights in the toilet – the evil 1%ers rule us all’ days. Of course, all we hear now are shouts from the rulers and their minions (i.e. Tea Party) about needing a ‘small govt.’ and no regs. in place or enforced.

    Lots and lots we’ve gotta do to overcome all the evil greed and power addiction, and…


  4. Dr. James R. Pannozzi DOM,LAc. on August 27, 2012 at 6:13 pm

    Thank you for writing this and warning people that behind all the clever words, “leverage”, “service” disease “management”, and all the rest of the anti-human corporatist goblledygook, the war against the middle class, and the 1%er creation of a special class of people that can get away with this sort of thing, is all the consequence of the infestation of our governments, and news media by those who place money ahead of human life and the futures of our younger generation.

    During the health care debates, doctors and nurses supporting a Medicare for all system were not only removed from the congressional visitor’s gallery, some were arrested (!!). Some more than once!

    It is clear now that the tremendous symbolic victory of passing any health care reform at all, ending such classic inequities as denial of coverage for prior conditions, discontinuing the coverage of people with serious illness after an insufficient time and denial of coverage for “unusual” diseases or for “new” treatments, must be followed by the second great reform in which EVERYONE IS COVERED FOR EVERYTHING. This means something like Medicare FOR EVERYONE, FOR LIFE. To do this, crazy wars to nowhere and mad hatter defense budgets must come to an end and the government must end its addiction to such things which bring profits to the few at the expense of the many.

    The OWS demonstratons, the spontaneous outbreak across major cities which unifies people of all political ideas into a common force against the globalist, corporatist, 1%er interregnum which makes the health care “insurance” swindle possible, must be supported and we must all join to bring pressure by peaceful protest to bear.

    Desperate justifications, explanations, legal obfuscations, misinformation, disinformation and just plan lies can no longer sustain the health “insurance” industry. The demand for reform cannot be long resisted by those in congress themselves who already enjoy special government protected health insurance. Let us let them know that their cozy place in congress will end by election defeat unless and until they acknowledge our plight and move to correct it.

    • Jeff Joseph on August 28, 2012 at 9:52 am

      Thank You Doctor too bad this essay will not be read at either Political Convention…

  5. Mike Pollock on August 27, 2012 at 10:42 pm

    In my book From Death’s Door to Disney World. Traumatic Brain Injury When Your NOT Rich and Famous, I write about the denial of needed services for my wife. I had to a get legal help to force the Insurance company to provide services that were covered in our policy. We prevailed. It was Aetna.

  6. Katrina Howard on August 28, 2012 at 8:34 am

    My daughter works for a company that was taken over by Bank of America. The company then forced its employees to buy into an Aetna plan for health insurance(Aetna, traditional or high-deductible, was the only plan offered). BOA is a major Aetna shareholder. How is this not a conflict of interest??? How is this legal?
    Although my daughter has the “traditional” plan, which is bad enough (out of pocket expense for a perfectly healthy pregnancy and delivery was $2400), next year the employee’s only option will be the high-deductible plan. The high deductible plan is a money-maker for the insurance company but a money-breaker for consumers/patients.

    Making only ~ $30,000, she had to make many sacrifices and it took her more than two years to pay off her medical bills.

    Furthermore, I believe the fact that her company provides health insurance, precludes her from participating in the health insurance exchange in NYS.
    Just another reason to dump the greedy insurance companies and support single-payer, Medicare for all.

  7. Lois Hamilton on August 28, 2012 at 2:11 pm

    No one who is not rich and privileged, with Cheney’s heart problems, would ever be alive today! It makes me ill to think that one of the very worst men ever to darken the doors of the White House and a War Criminal is given this chance that my father never had!

  8. Lucille G Goodier on August 28, 2012 at 3:38 pm

    When I worked the summer of 1947 for Mutual Benefit of Omaha, MB of Omaha was, back when there was still regulation, heavily fined when they were caught putting “riders’ in tiny print on the end of their poilicies which made almost impossible the insuree to collect when injured. In 1967, I was severely injured in car accident. Aetna made it impossible for me to get my hospital/medical bills paid. I had to sue the owner of the dog which caused the driver of the car I was in to swerve. Until the final settlement, we had to pay bills. We had to sell the property that we hoped to someday build our dream house on….never did get our dream house. In the meanwhile, I was forbidden to discuss the case & rumors about town were that I was trying to get rich off of it. It’s not “health Insurance”, it’s “wealth insurance” for the business men.

    • Carla Pena on August 29, 2012 at 8:14 am

      I like the the term “wealth insurance” because it is more about how the company gains wealth (not providing coverage). Another point is the protection provided in the settlements with the nondisclosure agreements related to the settlement. Why would a company not want the case discussed? Maybe because they did something illegal or at minimum, unethical. That needs to get changed too.

  9. Barbara on August 29, 2012 at 9:32 am

    Thank you, Donna, for another well done piece about the travesty of our “wealth care” system (credit to Lucielle G. Goodier).

    Health insurance corporations are equivalent in nearly all ways to investment banks and thus should be thought of in this way when analyzing their profit motive and profit-mongering tactics.

    The result is that, in spite of the ACA, they still own congress and the White House, and they act in every way as Death Panels for average citizens. They are Death Panels directly through denials for their policyholders, and indirectly through their skimming from Medicare and the domino effect this has on national coffers for public coverage.

    As many who read HCNOW and Donna Smith already know, I am not using the Death Panel analogy for dramatic effect. This is a literal characterization of their actions.

    Here are the organizations who own congress in the gigantic healthcare sector – for starters:

    AMA (and its many subsidiary specialty associations)
    Device Manufacturers
    Medical supply industry
    Investment banking
    Academia ?

    Who can plan and initiate a fight so big and against such foes?

    There is a game-over scenario here. The parallel lies in the developing countries where health care institutions DO exist, but they are EMPTY because no one can pay for care. The wealthy already have private health care so they are not even part of the equation.
    The USA, which loves to tout its superior system, is heading straight into a 3rd world model (excuse my use of an outdated reference) but it is to get the point across.

    As in all corrupt regimes, there is not a care about the fact that citizens will die amidst the glittering wealth held by a few.

  10. Gabriel Marquez on October 1, 2013 at 3:14 pm


    AETNA has denied my needed cancer treatments for my wife who is battling breast cancer – Every time there is an MRI or CAT Scan, they deny and I or the drs have to appeal – The last one is a procedure called Y90 for people with metastasis in their liver – They are denying based on the fact that the procedure was initially to be used for liver cancer patients and not liver metastasis of breast cancer – However, the procedure is in use for breast cancer patients and the results are an extended life with quality and no pain.
    They are inhumane – The dr is appealing AETNA’s decision at this time. – OCT 1st 2013 –