Plan departures leave questions for California policy holders August 19, 2013 General Covered California, United Healthcare, Aetna, Health Care Reform 0 While much attention has been given to the successful signing of health plans participating in Covered California’s new online insurance marketplace, it’s worth noting that some major players in the state’s current insurance market are refusing to play ball. In June, both United Healthcare and Aetna announced that they would not be participating in California’s individual market following the end of 2013. In announcing their departures, both companies noted that only a small portion of their overall business was conducted in California, and given the coming changes promised through the Affordable Care Act (ACA), no longer found it viable to offer plans in the state. Both firm’s decisions apply to the state’s individual market as a whole, not simply the portion that would be served by the exchange. United and Aetna currently make up 2 percent and 5 percent of the state’s individual market, respectively, together covering just shy of 60,000 Californians. While some observers are using the departure of United and Aetna to condemn the ACA, claiming that the increased regulation of the market in California forced the insurers out of state, others are more curious about how the smaller, regional plans will help absorb the roughly 60,000 residents who previously purchased covered through the two soon-to-be-departed firms. These plans, such as L.A. Care Health Plan, Valley Health Plan and Chinese Community Health plan are relatively unknown to the majority of Californians, but could play a large role in providing coverage to residents through the exchange beginning in 2014. In other departure news, Anthem Blue Cross announced last month that it would not be participating in Covered California’s Small Business Health Options Program (SHOP), the exchange’s small group marketplace, for at least the first year. Anthem’s decision to remain on the sidelines could potentially be a bigger issue than Aetna and United’s refusal to participate in the individual market. Recent estimates suggest that Anthem represents roughly a third of California’s small group market. With plans selected to offer products on SHOP beginning in 2014, it will be interesting to see who is willing and able to take up such a massive market share left behind as a result of Anthem’s departure. Comments are closed.
