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Major health insurance providers in California 'sitting out' ObamaCare

By Catholic Online (NEWS CONSORTIUM)
May 27th, 2013
Catholic Online (www.catholic.org)

Health care reform, or "ObamaCare" is scheduled to go into effect in six months and one week. The key provision of the Obama administration, the package ostensibly is intended to mandate individuals to carry health insurance and require that health-benefit providers are spending at least 80 percent of premiums collected on health care for its members. However, in the state of California, many major health care providers say that they're going to sit out the state's health insurance exchange 

LOS ANGELES, CA (Catholic Online) - All eyes are focused on California, which offers quite the blend of individual and commercial customers, as well as a number of soon-to-be Medicaid participants under the PPACA's Medicaid expansion. California has revealed the 13 contract winners who will be participating in its insurance exchange in the coming months.

Many familiar names remain on the list such as Kaiser Permanente, Blue Shield of California, Anthem Blue Cross and Health Net, which collectively make up a big portion of California's individual insurance market.

However -- notably missing from the list were UnitedHealth Group, CIGNA, and Aetna, which all kindly bowed out of being included into California's health insurance exchange.

When questioned about their decline in participation, UnitedHealth commented to the Los Angeles Times, "We are simply taking the time to carefully evaluate and better understand how the exchanges will work to ensure we are best prepared to participate meaningfully in their development."

A CIGNA spokesman was also quoted as saying, "We will continue to offer individual plans going forward [in five of 10 states], but we've decided not to participate in Covered California in 2014."

While UnitedHealth, CIGNA and Aetna combined are only seven percent of the total health insurance market, the message that these three large insurers are sending California is much more important.

With UnitedHealth not participating, the message appears to be that the largest insurer in the nation is still very skeptical as to how things will play out in these insurance exchanges.

The state of California offers a wealth of possibilities, but it's simply not worth the price of admission based on UnitedHealth's decision. A lack of a large national insurance presence in California's exchange is only bound to increase the mounting skepticism over how effective these exchanges will ultimately be in manufacturing competition among insurers.

In return, a lack of recognizable health insurance names could diminish consumer interest in researching these health plans, which would defeat the entire purpose of setting up the health exchanges.

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