It looks like insiders at Aetna (AET) may be taking out insurance claims of their own in the form of profit-taking and cashing in shares.
On one day last week, three executives sold about 138,800 shares for roughly $6.4 million — William James Casazza, general counsel, followed up the next day and disposed of more shares when he exercised options and sold 42,400 shares for $1.9 million.
We are constantly mindful of the theory that the fiscal cliff is one of the factors fueling selling by insiders, but there’s another plausible theory about Aetna: Last week at its annual investors conference, Aetna�s CEO Mark Bertolini didn�t mince words when he said President Obama’s health care reform law could drive premiums to as much as twice their current levels — what he called “premium rate shock for 2014.”
Avik Roy over at Forbes recapped the talking points quite nicely for us:
Most important of these are: (1) the �minimum actuarial value� requirement that forces insurers to provide more financially generous coverage with fewer co-pays and deductibles; (2) the �community rating� provision that forces younger beneficiaries to pay far more for insurance in order to partially subsidize older beneficiaries; (3) the �guaranteed issue� provision that forces insurers to take all comers, even if they are already sick; and (4) the �essential health benefits� mandate that forces insurers to cover health-care services that many customers wouldn�t otherwise want to pay for.
While the impact of the reforms on the health-care sector remains to be seen, we will certainly be keeping an eye out for further selling at Aetna. The stock is up about 1% today and nearly 15% compared to last year.
Aetna was list among the healthcare companies that could suffer under the new laws in a recent Barron�s Take.
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