Aetna 2013 Annual Report Download - page 53

Annual Report- Page 47
Risk Factors
You should carefully consider each of the following risks and uncertainties and all of the other information set forth
in this MD&A or elsewhere in our Annual Report or our Annual Report on Form 10-K. These risks and
uncertainties and other factors may affect forward-looking statements, including those we make in this MD&A or
elsewhere, such as in news releases or investor or analyst calls, meetings or presentations. The risks and
uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known
to us or that we currently believe to be immaterial may also adversely affect our business. Any of these risks or
uncertainties could cause our actual results to differ materially from our expectations and the expected results
discussed in our forward-looking statements. You should not consider past results to be an indication of future
performance.
If any of the following risks or uncertainties develops into actual events or if the circumstances described in the
risks or uncertainties occur or continue to occur, these events or circumstances could have a material adverse effect
on our business, cash flows, financial condition or operating results. In that case, the trading price of our common
stock could decline materially, among other effects on us.
Health Care Reform implementation (including the collection of, or other solutions to, the significant
assessments, fees and taxes first imposed on us in 2014; the 2014 imposition of guaranteed issue requirements;
and the first year of implementation of, and participation on, Public Exchanges); Medicare Advantage and PDP
rates for 2014; the integration of Coventry; and U.S. government fiscal policy present overarching risks to our
enterprise in 2014.
We expect to face significant business challenges and uncertainties in 2014, many of which are occurring for the
first time in our industry. We will become subject to significant assessments, fees and taxes imposed by Health Care
Reform. If we are unable to include these assessments, fees and taxes in our premiums and fees or otherwise adjust
our business model to solve for them, these assessments, fees and taxes could have a material adverse effect on our
operating results, financial position and/or cash flows. In addition, 2014 is the first year that Health Care Reform’s
guaranteed issue requirements, which do not allow us to medically underwrite our small group and individual
members, will apply. We do not have prior experience with pricing Public Exchange products or utilization of
medical and/or other covered services by Public Exchange product members. Public Exchange membership is less
than expected by the federal government, and there can be no assurance regarding the accuracy of the health care
benefit cost, membership or other projections reflected in our Public Exchange product pricing. CMS has published
final Medicare Advantage and PDP premium rates for 2014 that are materially below 2013 rates and which present
a meaningful challenge to our 2014 revenues and operating results. The integration of Coventry with our existing
businesses is a complex undertaking that will occur over several years. There can be no assurance that we will be
able to achieve the projected benefits of the Coventry transaction. U.S. government fiscal policy is subject to
change and can adversely affect us, including as a result of reductions in Health Care Reform funding, failure to
raise the U.S. federal government’s debt ceiling or any sustained U.S. federal government shutdown. There can be
no assurance that U.S. government fiscal policy, the implementation of Health Care Reform or additional changes
to the U.S. health care system will not adversely affect our business, cash flows, financial condition or operating
results. For additional background on these risks, see:
• “Outlook for 2014”, beginning on page 5;
• “Regulatory Environment - General”, beginning on page 29;
• “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 48;
• “Many aspects of Health Care Reform have yet to take full effect, are unclear, or are subject to change,
making their practical effects difficult to predict. Our business and operating results may be materially and
adversely affected by Health Care Reform even if we correctly predict its effects”, beginning on page 49;
• “We are subject to potential changes in public policy (in respect of Health Care Reform or otherwise) that
can adversely affect the markets for our products and services and our business, operations and financial
results”, beginning on page 50;