Aetna has denied any link between the Justice Department’s effort to block its merger with Humana and the company’s departure from the exchanges. Turns out those denials are not so true. Jonathan Cohn and Jeff Young at the Huffington Post have unearthed a letter from Aetna’s CEO to the Justice Department before the antitrust suit was filed:

[I]f the [merger] deal were challenged and/or blocked we would need to take immediate actions to mitigate public exchange and ACA small group losses. Specifically, if the DOJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint … [I]nstead of expanding to 20 states next year, we would our presence to no more than 10 states .… [I]t is very likely that we would need to leave the public exchange business entirely and plan for additional business efficiencies should our deal ultimately be blocked. By contrast, if the deal proceeds without the diverted time and energy associated with litigation, we would explore how to devote a portion of the additional synergies … to supporting even more public exchange coverage over the next few years.

In some quarters, the letter will be taken to prove that Aetna tried to blackmail the administration. Maybe that’s right. But, as Cohn and Young point out, there’s some evidence that Aetna was just stating a fact: that blocking the merger really would change its financial calculus about whether to stay in some exchanges. The line between a sincere promise and a strategic threat can be hazy.

In fact, the kind of unseemly negotiation on display in the letter isn’t that uncommon, especially in closely regulated industries. Firms will say to regulators, “We can stay in the market if you do X, but if you do Y, we can’t.” Because regulators depend on those firms to supply services to the public, they have to take those statements into account. They might make a counter-offer: “What if we do Z? Can you live with Z?”

At the same time, regulators can’t just take firms at their word. As in any negotiation, the firms may posture and bluff. Indeed, they might sincerely but wrongly believe that the sky will fall if regulators do something they don’t like: firms are risk-averse and tend to underestimate their ability to cope with changes in law. Regulators have to walk a fine line, taking firms’ concerns seriously, but calling bullshit where necessary.

That’s why it’s so hard to make out whether Aetna’s threat was sincere or strategic. Maybe its financial situation really has deteriorated as a result of the antitrust suit, so much so that it can’t afford to stay in unprofitable markets. Maybe, though, it had to follow through with the threat to preserve its credibility for future negotiations, even if it’s worse off as a result.

Probably it’s a bit of both. Still, Aetna’s not likely to get the benefit of the doubt. Its pious denials give its behavior a ring of hypocrisy. And there’s something disquieting about its thinly veiled suggestion that the Justice Department should bless anti-competitive conduct for short-term political advantage. Playing hardball with regulators may be common—but it can also be risky.

@nicholas_bagley