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By Catholic Online (NEWS CONSORTIUM)

7/3/2013 (2 years ago)

Catholic Online (

UnitedHealth decision will force about 8,000 customers with individual policies to seek new coverage

UnitedHealth Group Inc., the nation's largest health insurer is leaving California's individual health insurance market. The decision marks the second major company to exit in advance of the tumultuous changes under the Affordable Care Act.

These decisions by both UnitedHealth and Aetna carry a price. Both cannot reenter California's individual market for five years after they leave, according to regulators.

These decisions by both UnitedHealth and Aetna carry a price. Both cannot reenter California's individual market for five years after they leave, according to regulators.


By Catholic Online (NEWS CONSORTIUM)

Catholic Online (

7/3/2013 (2 years ago)

Published in Health

Keywords: UnitedHealth, Aetna, insurance, California, private insurance

LOS ANGELES, CA (Catholic Online) - UnitedHealth has notified state regulators it was leaving the state's individual market at the end of the year. The decision will necessitate about 8,000 customers to seek new coverage. Aetna Inc. last month, the nation's third-largest health insurer, made a similar move affecting about 50,000 existing policyholders.

Both companies say they promise to keep a major presence in California, and will focus on large and small employers.

Starting January 1, the federal healthcare law requires insurers to accept all individual applicants -- regardless of their medical history and provide a comprehensive set of benefits with limits on patients' out-of-pocket spending.

More national insurers aren't interested in playing by these new rules in states where their presence in the individual market is relatively small. More profits can be made by tending to the employer market.

"The business model of health insurance is fundamentally changing and some companies are willing and able to adapt," Sabrina Corlette, a research professor at Georgetown University's Center on Health Insurance Reforms says. "Given the limited market share those carriers had, UnitedHealth and Aetna have made the calculation that it required too much of an investment to change their strategy in California."

A spokeswoman for UnitedHealth said "our individual business in California has always been relatively small . [and] over the years; it has become more difficult to administer these plans in a cost-effective way for our members."

The news has sparked concerns on reduced competition on California consumers.

"I don't think this is a good result for consumers," California Insurance Commissioner Dave Jones said. "It means less choice, less competition and even more consolidation of the individual market with three big carriers."

Anthem Blue Cross, Kaiser Permanente and Blue Shield of California dominate the state's individual health market with a collective 87 percent market share, according to Citigroup data from 2011. UnitedHealth was a small player among individual policyholders with a two percent share. Aetna was slightly larger with a five percent market share.

These decisions by both UnitedHealth and Aetna carry a price. Both cannot reenter California's individual market for five years after they leave, according to regulators.


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