Could Humana Grovel Any More To Get The Aetna-Humana Merger Approved By The Obama Administration?

I just about fell off my chair listening to Humana CEO Bruce Broussard yesterday morning on CNBC.

Speaking about how he sees the future in the managed care industry, Broussard couldn't say enough good things about the value of the regulation the Obama administration and the Affordable Care Act (ACA) have done to make his business better and improve society.

He pointed to a new era of health insurers combining clinical management capabilities and relationships with providers as being critical to the future of managed care. But he didn't stop there saying that the ACA's regulation created an "innovation engine" for insurers and also credited a "regulated price environment, i.e. the medical loss ratio that we are required to live within--it really brings a very consumer oriented passion that is saving society health care costs."

And, he didn't make these points once, he made them twice during the interview.

The new Obamacare medical loss ratio (MLR) limits haven't stopped Humana from giving its customers lots of big Obamacare rate increases over the last three years.

Their business in the Obamacare Georgia health insurance exchange is a case in point.

Humana has 254,000 Obamacare members on the Georgia health insurance exchange--it's second largest market. But the insurer is losing lots of money and is reconsidering its strategy there in order to turn around its results for 2016. "We have to make a return," Broussard said. "We can't have one business being subsidized by another business." Apparently, Humana suffered from letting their patients see too many doctors who were not in their network. So, Broussarrd said, "Starting in July we will begin to start not allowing" as many out of network visits. Humana's CFO was also quoted as saying about Georgia, "If we have a problem again next year, I think we we'll be having a different discussion about our willingness to participate in the 2017 program."

So much for Obamacare regulations bringing an "innovation engine" to Humana and "a very consumer oriented passion that is saving society health care costs."

Why is Broussard now shamelessly pandering to the Obama administration?

Let me suggest it is because he is scared to death the Obama administration will block the Aetna-Humana merger on anti-trust grounds. He's pandering to the Obama administration arguing that the feds don't need to worry about too much market consolidation as a result of the proposed merger because the Obama administration is such a fabulous regulator.

If the Obama administration is flattered by this one, I have a bridge to sell them.

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