Aetna CEO: America’s ‘Fiscal Cliff’ Is Like “The Plague,” A “Financial Superstorm”; Layoffs Possible

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The so-called “fiscal cliff” facing America’s tax structure at the end of this year is like The Plague or a “financial superstorm,” Aetna’s CEO Mark T. Bertolini said Wednesday morning on CNBC’s Squawk Box.

He also threatened layoffs next year.

The “fiscal cliff” refers to a series of tax breaks set to expire Dec. 31 and new taxes starting in January related to federal health care reform. Additionally, federal spending cuts are scheduled to take effect Jan. 1, which would slash government spending. At the heart of the issue is the federal government’s budget and growing debt as elected officials fail to agree on a solution.

“It’s a bit like, you know, the 15th century castle gates closing during The Plague, if you think about it,” Bertolini said on CNBC’s Squawk Box. “We’re going to hope it goes by, and when it goes by, we’ll then re-open the coffers and the food stores. We don’t have the option of waiting any longer.”

“It is a superstorm, a financial superstorm that we need to get our head around and act in the same way as we acted with this last hurricane,” Bertolini said referring to bipartisan cooperation.

Aetna is planning for America to go over the fiscal cliff, Bertolini told Squawk Box. The Hartford-based health insurer is in “contingency” mode because he doesn’t know what the macroecomonic picture will be.

“What more contingency means is, I pull back on capital investment, which we’ve done – everything’s gated – and we layoff people,” Bertolini said. “So, jobs go out the window. And, so, the American people get hurt in this process.”

If the Gross Domestic Product declines in the first quarter, and unemployment increases, Bertolini said there could be a spike in utilization of medical services as people try to go to the doctor before they lose their employer-based health care.

So, does that definitely mean layoffs next year if tax cuts are rolled back and new taxes related to health-care reform are introduced?

“We have a head count holding flat, assuming we don’t go over the fiscal cliff,” Bertolini said on Squawk Box. “If we go over the fiscal cliff, I have to react, and, so, I know where I need to pull back.”

“In the end analysis, the top line has to grow,” he said of revenue. “If the top line doesn’t grow, you’ve got to do something about expenses. … Our goal is to hold head count flat.”

Bertolini is one of almost 90 corporate CEOs who are members of a Fiscal Leadership Council to the Campaign to Fix the Debt. The group says it is a nonpartisan movement to “put America on a better fiscal and economic path.”

At the beginning of the CNBC segment, Bertolini was asked whether anything has changed at Aetna related to the company preparing for federal health care reform, the Affordable Care Act.

“Today is the same as it was yesterday,” Bertolini said. “We just keep moving forward and implementing this Act. I think the bigger issue we’ll face is what happens with the fiscal cliff. That will have more to do with the subsidies and the taxes associated with this bill and our ability to move forward with full implementation. I think that’s where the bottom line is going to hit as we go through the fiscal-cliff discussions.”

About Matthew Sturdevant

Full-time staff journalist at The Hartford Courant and magazine freelancer with a master's degree in writing from Dartmouth. My work has appeared in The Los Angeles Times, The Chicago Tribune, Taiwan News, The Baltimore Sun and many other news sources. My blog has been referenced by, the Kaiser Family Foundation, the Georgetown Law Library and a number of organizations in healthcare and business. Sturdevant’s blog is "a well-written wealth of ideas," said The Donald W. Reynolds National Center for Business Journalism, (, May 18, 2011). I have experience writing for newspapers, magazines, Web sites and blogs as well as shooting and editing video. I made regular appearances on news-talk radio and on the NBC affiliate station in Corpus Christi, Texas. I made occasional appearances on the Fox affiliate in Connecticut promoting Hartford Courant articles.

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47 thoughts on “Aetna CEO: America’s ‘Fiscal Cliff’ Is Like “The Plague,” A “Financial Superstorm”; Layoffs Possible

  1. America Is Dying

    And $13 million a year can be paid to play a child’s game!

    America has some serious priority problems!

    (Reuters) – The Boston Red Sox and David Ortiz agreed a two-year $26 million deal on Monday that could keep the popular slugger in Beantown for the remainder of his career.

  2. msavage

    And so it begins–the plutocracy, having lost the election and the battle to finalize the takeover of the 99 percent, starts to make threats about what will happen if they don’t get their way.

    1. ZZMike

      Nice try. Think about the threats Obama & Co make if they don’t get their way.

      Face facts: new taxes on people, new taxes on business, new regulations – we can’t afford it. When Obama gets his way, only the Congress will be in the 1%.

  3. Anonymous Independent Voter

    So a few things I take away after reading this.

    First of all how did Obama get re-elected? I voted for him in 2008- liked his enthusiasm/ideas but we’re now at 7.9% national unemployment. A # by the way that’s higher now than before he came into office. Avg household income is down $4,300 per family over the last 4 years. Something like 1 trillion in debt continuosly over the last 4 years, and 15 million more on food stamp today compared to before he came into office. Not saying Mit would have righted the ship but why not give someone else a shot? So now we have a lame duck president in office for another 4 years, gas prices a $4.00 a gallon, no jobs and now CEO’s of fortune 500 companies talking about lay offs due to the pending fiscal cliff.

    Which leads me to my 2nd take away, which is Aetna.

    It is my understanding that over the last 4 years this company has continued to have periodic lay offs and early retirement offers over the last 4 years. Thinning their work force down to about 30,000 employees. On Oct 25th 2012 the company reported 3q profits of $499.2 million compared to $490.4 million a year earlier also reached their goal of 18.2 million medical members. Quarter after quarter the company has continued to post solid financials but the lay offs havent stopped. Why? Is this the new status quo? Are these big business’ using poor unemployment #s as an excuse to continue layoffs while making record profit/growth?

    Let’s not fool ourselves, Aetna will not be the only company to consider layoffs if the fiscal cliff happens in January. What makes anyone think that the president/congress/senate can get along NOW but not over the last 4 years?

    I’m extremely disappointed in the direction of this country. As I watched the stock market plunge today, as I read several articles like this one today. I wondered to myself-where will we be in 4 years? Scary isn’t it..

    1. Mitchell Simpson

      You ain’t seen nothing yet! The most divisive president in history, who by the way, appears to not like anything having to do with free markets, is going to unleash all sorts of things that are unfriendly to businesses, no matter how large or small. He’s only getting warmed up. Twas too bad more people didn’t wise up and not give him four more years, but this country got the president it voted for. I only wonder who he is going to be blaming now?

  4. Mitchell Simpson

    It’s ok .. Obama is going to fix everything. Don’t worry . . . actually, we haven’t seen anything yet and it most likely isn’t going to be pretty or good for anyone.

  5. Brian White

    Funny one day after the election. All those people that work at Cigna are foreign national Indians anyway, so no harm no foul.

    1. Anonymous Independent Voter

      Speaking of Cigna, how bout them laying off roughly 1300 employees. And somehow this doesnt go against DANNELL Malloy’s first 5 tax relief program? I can’t wait for the gov election to come around next!

      1. ME

        I agree.. ESPN also.. They make the first five after laying off over 400 employees in the past 4 years. But they shifted 300 jobs from NY so lets build them a new digital center on the tax payers dime.

  6. America is Dying Because Large Corporations are Bleeding Us

    Entertainers and sports figures get paid because people pay to see them …. stop going to games and buying merchandise and their salaries will fall ….. the market can bear this and you have the choice not to participate. Do you have the same choices for health insurance? Is it just a luxury that you can do without? Do you truly have an open market system of choices? Let them earn money any way they want … that is capitalism …. just NEVER give them any more incentives to stay or retain workers …. let them success or fail on their own merits and policies and stop supporting their profits with taxpayer money. NO MORE CORPORATE WELFARE …. Let them move all of their operations to India and start refusing their goods and services on large levels …. don’t let the door hit you Corporate America …. I hope you enjoy Hyperabad …. I hear that it is lovely this time of year.

    I have news for you … large insurance companies are just spewing garbage trying to protect their profits. “Layoffs, cost increases …”. They have been laying off and increasing premiums for the last 10 years …. are you all stupid enough to think anything will change that?!?! If so, then you are more stupid than they are. They are still so profitable that they can compensate their senior management in record fashion (while freezing or reducing the wages and bonuses of non-senior employees) … and then out of the other side of their mouth state that layoffs for the masses are imminent ….. the layoffs would have come either way and be replaced by cheaper offshore labor …. WAKE UP PEOPLE!!! … .THIS IS JUST ANOTHER EXCUSE THEY ARE USING TO PROTECT THEIR OWN AGENDAS ….. give us true insurance choices and then WE will decide who we would like to pay for services (this is what they fear most with ObamaCare ….. no more oligarchies)!!

  7. Quan

    No more threats, the people have spoken, they want Obama and his policies. It’s time to strafe the business landscape with layoffs and contraction. No investment, no hiring and certainly no growth.

    Business leaders unite. Devastate this economy and drive the unemployment rate up to 12%. And while you’re at it, drop as many people as possible from your company paid health care roles. Pay the fines, sit back and laugh at the Obama administration.

    1. msavage

      Seriously–that sounds like treasonous talk to me. You sound like you’re advocating the deliberate sabotage of the U.S. economy.

  8. ccbeachcomber

    The only thing this election proved is the majority of the country believes in voodoo and witch doctors. There was an opportunity to elect a guy who eats, breathes and sleeps numbers, knows every trick in the book and has the fortune to show for it. The idiot, hysterical media certainly did their part. Good for you. You’re getting what you deserve. Amazing.

    1. Right from the Left

      Unfortunately the vast majority of Congressman supported by this CEO and greed based “Americans” have taken an Oath to Grover Norquist in which they have denounced their oath to the United States. Their loyalty lies with this right wing anti USA Fanatic. And like the sheep they are and or Fanatics wearing suicide vests, they will probably go over the cliff instead of doing the right thing and upholding their oath to the United States. These are your boys Mark Bertolini… YOU are a major part of the problem. You are a cancer within the United States and the rest of us are tired of carrying you.

      1. msavage

        Well said, right from the left. See Quan’s comment above. Cut from the same cloth of those you mention in your comment. In some countries, talk like that’d get you thrown in jail for treason.

  9. dave

    Why wasn’t this discussed before the election?

    Because the news media had to hide the truth from the voters to get Obama elected.

    It must be fun for the news industry to lie to [people and treat them like sheep.

  10. Anonymous Independent Voter

    I cant help but read through some of these comments..small sample I understand but everyone here seemingly has had it with how the last 4 years went. WHERE ARE ALL THE PEOPLE SUPPORTING OUR NEWLY ELECTED OFFICIALS?! How did this guy get in again, I don’t get it!

  11. Anonymous

    Nothing new here – Aetna goes through layoffs every year. Aetna chips away at employee benefits every year.

    1. msavage

      Exactly–this has been Aetna’s plan all along–chip away at employee benefits while rewarding CEO’s and higher management with ridiculously bloated salaries. There is no change in the game plan–this guy is just stirring the pot. Despicable.

  12. Rob

    The worst thing to come from the Obama administration is this government sanctioned class warfare. This is a FREE MARKET ECONOMY. Always has been and always will be. CEO salaries are interesting discussion but have no real bearing on the behavior of corporations or the end results. They are a TINY PORTION OF CORPORATE EXPENSES. If we feel there is adequate competition in the markets then the MARKETS DETERMINE pricing. Employers shop for the best rates for their medical plans. But end of the day, they are publicly traded corporations and serve their SHAREHOLDERS and their customers. This is what creates jobs, state, municipal and federal tax revenue. Those that suggest government healthcare? All of those jobs become government jobs and the government loses all the revenue. People should take care to understand exactly how our economy works.

      1. Rob

        Interesting, and also a load of crap. Its a Free Market Economy, there is adequate competition in most markets, definitely in the insurance market. The companies are mostly publicly traded, and all is done under the law. Government revenues come from Corporate and individual taxes. Free market. Now we can talk about the failure of GOVERNMENT in BOTH parties, but businesses in general are doing what they are created to do and what the market allows them to do (always with the caveat that regulators need to make sure they are following the rules).

    1. Daisy14

      FREE MARKET?????? How can a public union require a taxing authority (e.g. Teachers union and towns) to purchase them health insurance from a private company. How is that even legal? and then the private company can decide to deny you coverage if you get too sick. We need a public insurance choice – such as being able to buy into Medicare and completely eliminate employer benefits – everyone has to buy their own health insurance just like they do their car insurance.

      1. ZZMike

        I agree. Everyone who wants it should have to buy their own insurance. But they should not be forced. No one who doesn’t drive is forced to buy auto insurance – but wouldn’t it drive down the price if everybody was forced to? Add homeowners and renters insurance. Where should it stop?

        The main point is that the government should not force anyone to buy anything.

  13. BC

    What you all fail to see during these number rises is that the value of the dollar has basically been cut in half. Everything costs significantly more than it did in 2008. gas, oil, corn, and pretty much everything has doubled in price, or the price stayed the same and the box got smaller.

    So, yes, they are showing 9 million more, but really, 400 mil from 2008 is like 800 mill today. so 410 mill is actually a lessor value, even though the numbers are higher.

    What we have is unsustainable. We’re F’ed to say the least.

    the cliff IS coming, nd the only thing that will matter soon is how much food and ammo you have….

    Call me crazy…. but ask Yugoslavia how it was 25 years ago….

  14. JustAnotherTaxPayer

    If this man was truly concerned for the welfare of the general public he would start by delivering better insurance, at a lower cost, by modifying the outrageous profit margins Aetna, and all other insurance companies take, on a product that is not like selling used cars. Second he might suggest, since he seems so concerned for the public, that he,and all his other one percenters, stop blaming stock holders as the reasons for their outrageous rates, puirsuit of obscene profits, and oh, those insane bonuses they take.

    I remember a senior executive from Aetna, several years ago, attending a town hall type meeting at Griffin Hospital on the need for healthcare reform, in a stretch limo. Yup, pulled up right in front, in full view of the 200 people worried about the price of their health incurance and health care, through a set of plate glass windows, in a very long limo, which could have carried 20 people, but it was just him and his briefcase.

    And the Courant splashes big headlines to this propaganda they push, just to enrich themselves.

    The end of the world cannot occur as often as the press, the economists, the weather people, and particularly those that support the current form of the Republican Party would want the public to believe.

    I remember a time when there were cartoons of men carrying signs standing on street corners, and the signs proclaimed “The end of the world is near”. They were laughed at as it was a ploy to scare people to seek out religion. The current, high media, doomsday forecasters should be laughed at, but they are legitimized by a brainless brand of media that trys to control the emotions of the public to sell products for whoever is paying for their ad time.

    1. dr. z

      “outrageous profit margins”?
      Anonymous Independent Voter mentioned above, in another attempt to point out Aetna’s profitability, “3q profits of $499.2 million compared to $490.4 million a year earlier also reached their goal of 18.2 million medical members”. That sounds big, but can easily be seen to work out to $9 a month profit per member, while average medical costs per member are 50 times that. This is in line with all the profits reported by medical insurers, where a spectacular year is when you hit 5%. Whatever valid complaints exist about medical insurers, “outrageous profit margins” is not one of them.

  15. SickOfPolitics

    This guy is ridiculous talking about layoffs. Maybe the Aetna CEO who makes tens of millions a year in salary, stock options, etc. can give back a few million so that the average guy at Aetna making 50K a year can continue to feed his family. Corporate greed at it’s finest.

  16. jcsr

    Oh, my: Mnsngr. Bertollini is having a little Tissy fit this morning because he, The Koch brothers and the 99 other cohorts spent all that money and still couldn’t put Humpty – Dumpty in office.

  17. Bert

    This is just anoother excuse for corporate greed. Take away 5 vacation days from your employees who have over 25 years of service. I guess the board members and you will give yourselves a very hefty bonus next year.
    You need to be taxed 25-30%. Or just try living off a measily $45K per year with high priced health insurance.

  18. alan

    as a 55 yr old IT professional I am scared to death. Multi degrees, certs, means little anymore. I make what an assistant principal makes(not bad) but have no security, a 401k, kids in college and every day you can feel the heat. My similar friends in Sundstrand and Pratt say the same. HOw can we have a state where the only people with security and pension work for the govt or education. This was not the situation when I was studying engineering in late 70’s early 80’s- everyone was in the same boat. I go to town functions and so many state and public ed workers at my age without a care in the world. It is sick- and by most standands I am doing well. What happen if I got laid off and went to $15/hr on some outsourced service desk.

    1. msavage

      You think that people who work in education have security? Have you been paying any attention to what’s going on in education lately? I don’t know where you live, but I don’t know many folks in public education who are living “without a care in the world” right now.

      1. alan

        I dont know of a single tenured public school teacher who has been laid off in Conn. I know a few young ones who have but a 55 yr old teacher can phone it in and count on a 70% pension(unfunded)after 35 yrs which is a 800K annuity. I know msnbc has shows like “ed” that say they are getting laid off but not true in conn

      2. ZZMike

        “You think that people who work in education have security?”

        Yes, they certainly do. They have great retirement benefits, they can’t be fired unless they’re convicted of High Treason – and even then only after a long appeal process. They get to retire with full pay and pension – pensions that they paid nothing into.

        maybe your state is different.

  19. Me

    All the Hartford area insurance companies are laying off. Every week I see less familiar faces and more 20somethings that cant even say thank you when you hold the door for them. One person was told their job was being eliminated at the end of the year, but they must stay and train their replacement, who happens to be a 20 something. I see more and more people from India here, at times I wonder if I really am in the USA.

  20. Cassie

    That’s bull. Our wages are lower because as always, when you answer to shareholders, who want more money, companies fire people and send jobs overseas. Folk that are here are so desparate for jobs, that salaries have been lowered because there are people who are willing to work for less and are so greatful that they have jobs that they don’t care about salaries as long as they have jobs with benefits (I am one of them). How is that the fault of the president? He’s talking layoffs, but I bet he will still reap his salary/stock options, enough to save a couple of hundred jobs. Will he? Absolutely not. Where is his sacrifice for the country? Will he do his part? Probably not.

  21. Herman from Hartford

    Excellent article

    We have plenty of smart people in Government who will solve this.

    There will definitely be paid felt in 2013.

    Insurance companies have made a ton of money for their investors and that will always continue.

    The problem is insurance companies have so much cash and profits for the rainy day they are making insurance unaffordable for at least 50% of Americans.

    Thank God for Obama Care. At least he will care for the poor and disenfranchised which now is probably 97% of the 50%.

    1. DON886

      Most health insurance from employers is done with the the employer self insuring. The employer pays Cigna or Aetna a fee for administering the accounts , but the employers makes all the rules , not the insurance companies. The employer pays all the claims , not the insurance companies.

      Most folks do not understand that the insurance companies have no control on most of this,

  22. Mark

    But he stood behind Obamacare. He’s a total sell out.
    He should cut his own pay before any layoffs because he made the mistake supporting Obamacare not the loyal employees.

  23. OhMy

    The entire insurance industry is part of the problem. They have been outsourcing jobs overseas and laying people off for years. They’re just using Obama as a scapegoat right now. Layoffs would occur no matter who was elected.

  24. Gordon Hard

    What I do not understand is why Aetna and the other insurers will not do very very well under Obamacare since suddenly millions and millions of people who do not have health insurance will be forced to buy it. These yammering CEOs who just hate government spread panic in the markets by announcing that they’re pulling their capital out, and then blame the ensuing market crash on “the Government.” Why don’t these sissies man up and quit spreading fear? And this doomsayer is from the one industry that cannot help but benefit? Forsooth!

  25. Tom Richards

    It is good to see the election is all done with. With all of the problems going on in Europe it would be nice to see the President focus more on the economy and challenges we face, the most prominent being the ‘Fiscal Cliff’

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