Thread: NATION’S LARGEST HEALTH-CARE INSURER BAILS ON CALIFORNIANS

NATION’S LARGEST HEALTH-CARE INSURER BAILS ON CALIFORNIANS


By: David Harsanyi
7/2/2013 01:03 PM

Sorry, you can’t “keep your insurance” if you like it, California.

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

The dearth of affordable health-insurance policies for individuals was one of the big problems Obamacare was going to solve. Rather than opening up a national marketplace, The Affordable Health Care Act was allegedly going to inject more choice and keep rates down through fabricated state-run “exchanges”.
California, which has led the way on implementation of Obamacare, has seen UnitedHealth, Aetna and Cigna all already opt out of participating in the state exchange. And now UnitedHealth has notified state regulators that it will abandon the state’s individual market altogether (it can’t come back for five years), which means 8,000 customers will have to find new coverage. The third-largest health insurer in the country, Aetna, has already left the market – and another 50,000 policyholders are searching for insurance.
There are still plenty of big players in the individual market (for now) but those California residents who are looking for new providers can thank price controls. As the Los Angeles Times points out, California has been “more aggressive than other states” in coercing insurers to be “competitive” by setting caps on deductibles and benefits across four main product categories. Some companies obviously see no future in such a highly regulated marketplace.
Think about this: Recently, Peter Lee, the executive director of California’s individual insurance plans under the Affordable Care Act, recently bragged that rates submitted “for the 2014 individual market ranged from 2 percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.” (Never mind that Avik Roy at Forbes quickly debunked the misleading claim, finding individual rates for a typical nonsmoking 25-year-old man in California would increase of 64 to 146 percent.) How could California could get this done? By forcing insurance company profit margins to be as low as 2 percent.
Sounds nice. But someone has to pay. And in California, Aetna is proposing a rate increase of 22 percent; Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for many policyholders.
—————————
Follow David Harsanyi on Twitter @davidharsanyi.


http://www.humanevents.com/2013/07/0...-californians/

More individual insurance Companies Bail in Califorina ahead of Obamacare

Jul 2nd, 2013 @ 12:07 pm › clyde


The move by UnitedHealth, the nation’s largest health insurer, will force about 8,000 customers with individual policies to find new coverage.
As reported by The Los Angeles Times, the nation’s largest health insurer, UnitedHealth Group Inc., is leaving California’s individual health insurance market, the second major company to exit in advance of major changes under the Affordable Care Act.

UnitedHealth said it had notified state regulators that it would leave the state’s individual market at year-end and force about 8,000 customers to find new coverage. Last month, Aetna Inc., the nation’s third-largest health insurer, made a similar move affecting about 50,000 existing policyholders.

Both companies will keep a major presence in California, focusing instead on large and small employers.

The moves illustrate how different companies are responding to a major overhaul of the health insurance market for millions of consumers. Starting Jan. 1, the federal healthcare law forces 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.

Healthcare experts said some national insurers aren’t interested in playing by those new rules in states where their presence in the individual market is relatively small and 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,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms. “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 departure of another big-name insurer raised concerns about the effect of reduced competition on California consumers.

“I don’t think this is a good result for consumers,” said California Insurance Commissioner Dave Jones. “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% market share, according to Citigroup data from 2011. UnitedHealth was a small player among individual policyholders with a 2% share. Aetna was slightly larger with a 5% market share.

Anthem is a unit of WellPoint Inc., the nation’s second-largest health insurer.

UnitedHealth and Aetna cannot reenter California’s individual market for five years after they leave, according to regulators.

This year, both companies opted against selling individual policies in Covered California, the state-run insurance market opening in January. In May, the state selected 13 other health plans and announced proposed rates that were lower than expected.

Outside California, UnitedHealth said it expects to participate in about a dozen exchanges across the country for individuals or small-business customers.

“We continue to evaluate opportunities and make decisions regarding exchanges on a state-by-state basis,” said company spokeswoman Cheryl Randolph.

California has been more aggressive than other states in forcing insurers in the exchange to compete more directly on price by establishing uniform deductibles and benefits across four main product categories. In response, many insurers have squeezed hospitals and physician groups for better rates and formed smaller networks of medical providers to hold down premiums.

In March, UnitedHealth proposed a 9% rate increase for about 2,000 California policyholders with student health insurance policies that was scheduled to take effect Aug. 1. That filing with the state insurance department was later withdrawn, records show.


http://gopthedailydose.com/2013/07/0...-of-obamacare/

Meanwhile, the biggest insurers in the state — Kaiser Permanente, Anthem Blue Cross and Blue Shield of California — are all expected to participate in the state-run market for individual health coverage.

http://www.alipac.us/f9/california-health-exchange-reveals-obamacare-premium-costs-279243/