The CEO of the country's third-largest health insurer is threatening layoffs if the government doesn't reach a deficit reduction deal in the coming weeks.
"The American people are going to suffer because we'll lay them off -- because we know how to respond to these kinds of situations," Aetna CEO Mark Bertolini warned on Monday at a Wall Street Journal event, according to Marketwatch. Bertolini said that if the U.S. does not avert the fiscal cliff with a long-term deficit reduction plan, he and other CEOs will have no other choice.
Debt deal or not, Aetna will likely have to restructure its business in the wake of its recent merger agreement with Coventry Health Care. That may mean layoffs, even as the company adjusts to an influx of new customers thanks to the implementation of Obamacare.
Obamacare is estimated to expand the health insurance market by 16 million Americans by 2019, and it requires health insurers to not turn away the sick. As a result, both costs and revenues at Aetna are likely to rise, and the company may need to cut some workers and hire others to deal with these changes.
Last week, Bertolini pushed the same message on Bloomberg News, telling the news outlet that he is considering layoffs or a hiring freeze if the government does not avoid the fiscal cliff.
Bertolini has been an outspoken proponent of slashing government debt with cuts to the social safety net. He recently signed a letter from more than 80 CEOs demanding a deficit reduction deal that would include cuts to Medicare and Medicaid, Social Security "reform" (that is, probably cuts) and higher taxes. He also is on the CEO council of the Campaign to Fix the Debt, an organization demanding a deficit reduction deal soon.
Cutting the budget too quickly can have negative economic consequences, according to some economists. Three hundred and fifty economists signed a letter on Wednesday warning that premature austerity can increase unemployment, stymie economic growth and ultimately increase the deficit.
CORRECTION: An earlier version of this story cited data from financial website NerdWallet that showed Aetna paid a negative tax rate. That was incorrect. This article has been updated to reflect that Nerdwallet now says that Aetna paid a 30 percent tax rate last year, and Aetna says it paid a 35 percent tax rate. Nerdwallet corrected its numbers Thursday evening.
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