EDITORIAL: Editorial: The Sad End Of Aetna’s Autonomy

Dec. 04--The nearly $70 billion purchase of Aetna Inc. by CVS Health Corp. looks like the end of independence for the insurance giant that has been synonymous with Hartford for two centuries.

If the deal is approved by regulators and shareholders, Aetna will no longer be a standalone health insurance company but a subsidiary of the Rhode Island-based drugstore chain. Aetna CEO Mark Bertolini will step down and take a seat on the CVS board of directors. Policy will be dictated from Woonsocket.

Though the deal could ultimately be good for consumers, it would be the death knell for the autonomy of the company with deep roots in Hartford. Local merchants started the Aetna Fire Insurance Co. in 1819 over meetings at a coffeehouse on State Street. In 1853, the business was incorporated as the Aetna Life Insurance Co.

How the transaction affects Aetna's 6,000 jobs in Connecticut -- 4,000 of them in Hartford -- is unclear just now. But only six months ago, Aetna's CEO had promised that moving the company's headquarters to New York City -- another blow to Hartford -- would have "minimal impact" on the "vast majority" of employees at home. "We remain committed to supporting a vibrant and healthy Hartford," Mr. Bertolini said then. Let's hope that commitment continues.

This is, after all, the place where the deepest industry knowledge is still rooted, nearly a century after Mark Twain called Hartford "a city whose fame as an insurance center has extended to all lands." To demonstrate its commitment, CVS should shut down Aetna's New York shop and move the handful of executives there back here, where they belong.

Aetna, Hartford Go Way Back

Aetna's story has been so intertwined with Hartford's that Morgan G. Bulkeley, Aetna's third president, was also the city's mayor and Connecticut's governor in the late 1800s. He was the son of Aetna's first president and had attended Hartford Public High School. Another city high school is named for him.

From its home base here, the company has been adept at navigating changes in American society over two centuries. It started with insuring against fire, then greatly expanded its coverage before narrowing it to health insurance, mostly through employers.

Through it all, Aetna has stood by Hartford, at least philanthropically. To name just a few of many examples, it partnered with the city on building the Hartford Civic Center in the 1970s and put $15 million toward Hartford redevelopment in the late 1990s. This year, Aetna pledged with two other insurers to give $50 million to Hartford over five years. That didn't quite make up for moving headquarters out of town, but it showed the company still cared.

Why Merge At All?

Companies such as CVS have been spooked by the same force that has taken the wind out of bookstores, movie theaters and malls: Amazon. The mega-disrupter wants to sell prescription drugs online. CVS's purchase of Aetna is a defensive move to give the pharmacy chain a big customer base that might otherwise fill prescriptions on the internet.

For CVS, the deal makes sense, as does its vision of getting closer to consumers with mini-medical clinics in its pharmacy storefronts around America. It might also be a good deal for consumers, ultimately, though the jury is out on that. CVS would have more leverage to negotiate lower prices with drug companies. The question is whether the company will share the resulting savings with consumers.

To be parochial, however, we can't help but feel a heart twinge at the thought of Aetna, conceived in a coffeehouse in Hartford and rising to become one of the nation's largest health insurers, as a subdivision of an out-of-town company.

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