Aetna 2006 Annual Report Download - page 43

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Government payors can determine premiums.
We are increasing our focus on the non-Commercial part of our Health Care business as part of our business
diversification efforts. In government-funded health programs such as Medicare and Medicaid, the government
payor determines the premium levels. If the government payor reduces the premium levels or increases premiums
by less than our costs increase and we cannot offset the impact of these actions with supplemental premiums and
changes in benefit plans, then our business and operating results could be materially adversely affected. In
addition, premiums for certain federal government employee groups are subject to retroactive adjustments by the
federal government. Twelve percent of our consolidated revenues, and 13% of the revenues of the Health Care
business, were derived from the federal government in 2006. Any such adjustments could materially adversely
affect our business and results of operations.
We also face other risks that could adversely affect our business, results of operations or financial condition,
which include:
• Failure of our prevention and control mechanisms related to employee compliance with internal policies,
including data system security, and/or unethical conduct by managers and/or employees;
• Health benefits provider fraud that is not prevented or detected and impacts our medical costs or those of our
self-insured customers; and
• Financial loss from inadequate insurance coverage due to self insurance levels or unavailability of insurance
and reinsurance coverage for credit or other reasons;
• A significant failure of internal control over financial reporting;
• Failure of our corporate governance policies or procedures.