Healthcare Individual Mandate Too Weak to Matter, Aetna CEO Says

Wall Street’s concern about the U.S. Supreme Court’s looming decision on President Obama’s healthcare overhaul is overblown because the provision at the heart of the law already has little teeth, the top executive at Aetna Inc. said.

The court in March will hear arguments on the part of the law that requires Americans buy insurance or pay a penalty, known as the individual mandate. A ruling is expected by the end of June.

Some insurers have argued that a strong individual mandate is critical for the stability of the insurance pool by ensuring that healthy people buy insurance in addition to sick patients.

Investors are concerned that a ruling that eliminates the individual mandate but continues to require insurers to enroll people with pre-existing health conditions would hurt profits.

“Even as it exists today, the individual mandate is weak and still presents problems because the penalty is so low,” Aetna Chief Executive Mark Bertolini said in an interview on Wednesday. “If you get rid of it, I don’t know that it makes all that much of a difference.”

The Supreme Court decision, Bertolini said, “presents more of an opportunity for us to revisit how healthcare reform is structured than actually undoing the underlying dynamics or fundamentals of what they put in the bill.”

Bertolini said that the parts of the overhaul law that have already been implemented are “not going anywhere.”

“What we should be thinking about is if we do get an opportunity to change the bill, which we think we will, then what would we suggest?” he said.

As part of its authority under the new law, the U.S. Health and Human Services Department last week rebuked a privately held insurer, Trustmark Life Insurance Co,. for what the agency called unreasonable premium increases. The law requires insurers to disclose and justify health premium increases of more than 10 percent.

Bertolini said Aetna has not yet begun to see the impact of rate review because market trends have led the company to requests for lower increases.

“The 10 percent threshold has not caused us to ask for rates lower than 10 percent,” he said. “The market has, because the trend has been so low.”

Health insurers have reported very low levels of healthcare claims over the past year as patients delay doctor visits and procedures during the weak economy.

Bertolini spoke as Aetna, the No. 3 U.S. health insurer, launched a new branding campaign, designed to underscore its change from an insurance carrier to a “health solutions” company.

The branding campaign reflects changes the company has been making for the past several years, Bertolini said.

With consumers bearing an increasing amount of healthcare costs, he said, “we’re going to have to position ourselves in the eyes of the consumer as being somebody who, one, is helpful and, two, gives them a lot of ways of accessing the system and understanding the system better.”

(Reporting By Lewis Krauskopf; Editing by Tim Dobbyn)