Aetna 2015 Annual Report Download - page 56

Annual Report- Page 50
The Proposed Acquisition may not be accretive, and may be dilutive, to our operating earnings per share, which
may negatively affect the market price of our common shares.
The Proposed Acquisition may not be accretive, and may be dilutive, to our operating earnings per share. Our
projections relating to the impact of the Proposed Acquisition on our operating earnings per share are based on
preliminary estimates that may materially change. In addition, future events and conditions could decrease or delay
any projected accretion or could result in dilution, including the timing of the closing of the Proposed Acquisition,
adverse changes in market conditions, additional transaction and integration-related costs and other factors such as
the failure to realize some or all of the anticipated benefits of the Proposed Acquisition. Any dilution of, or decrease
or delay of any accretion to, our operating earnings per share could cause the price of our common shares to decline
or grow at a reduced rate.
Following the completion of the Proposed Acquisition, our exposure to the funding, regulatory and other risks
associated with Medicare, Medicaid and dual eligibles products will increase significantly.
Upon completion of the Proposed Acquisition, the proportion of our total Health Care revenues, membership and
medical costs that are derived from Medicare, Medicaid and dual eligibles products will increase significantly. As a
result our exposure to the funding, regulatory and other risks associated with these products also will increase
significantly. For additional information on these risks, see:
• “Legislative and regulatory changes could create significant challenges to our Medicare Advantage and
PDP revenues and operating results, and proposed changes to these programs could create significant
additional challenges. Starting in 2017, federal funding for Medicaid expansion will decrease. Entitlement
program reform, if it occurs, could have a material adverse effect on our business, operations or operating
results”, beginning on page 53;
• “Minimum MLR rebate requirements limit the level of margin we can earn in our Commercial Insured and
Medicare Insured businesses while leaving us exposed to higher than expected medical costs. Challenges to
our minimum MLR rebate methodology and/or reports could adversely affect our operating results”,
beginning on page 54;
• “If we are unable to include the significant assessments, fees and taxes imposed on us by Health Care
Reform in our premiums and fees or otherwise solve for them, our operating results, financial position and/
or cash flows would be materially and adversely affected. The inclusion of these assessments, fees and taxes
in our premiums also could adversely affect our ability to grow and/or maintain our medical membership”,
beginning on page 55;
• “Our business activities are highly regulated. Our Medicare, Medicaid, specialty and mail order pharmacy,
Public Exchange and certain other products are subject to particularly extensive and complex regulations.
If we fail to comply with applicable laws and regulations, we could be subject to significant adverse
regulatory actions or suffer reputational harm which may have a material adverse effect on our business.
Upon completion of the Proposed Acquisition, our exposure to these risks will increase significantly.
Compliance with future laws, regulations and/or judicial decisions may reduce our profitability and limit
our growth”, beginning on page 55;
• “We frequently are subject to regular and special governmental audits, investigations and reviews that
could result in changes to our business practices, and also could result in material refunds, fines, penalties,
civil liabilities, criminal liabilities and other sanctions”, beginning on page 57;
• “Our litigation and regulatory risk profile is changing as we offer new products and expand in business
areas beyond our historical core business of providing Commercial managed care and health insurance
products in the United States. Completion of the Proposed Acquisition would accelerate that change”,
beginning on page 58;
• “We are subject to retroactive adjustments to and/or withholding of certain premiums and fees, including as
a result of CMS RADV audits. We generally rely on health care providers to appropriately code claim
submissions and document their medical records. If these records do not appropriately support our risk
adjusted premiums, we may be required to refund premium payments to CMS”, beginning on page 60;