UHG, Aetna, Cigna....Opt Out of CA In...

UHG, Aetna, Cigna....Opt Out of CA Ins Exchange

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Since: Oct 12

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#1 May 23, 2013

by Chad Terhune, Los Angeles Times

Some prominent health insurers, including industry giant UnitedHealth Group Inc., are not participating in California's new state-run health insurance market, possibly limiting the number of choices for millions of consumers.

UnitedHealth, the nation's largest private insurer, Aetna Inc. and Cigna Corp. are sitting out the first year of Covered California, the state's insurance exchange and a key testing ground nationally for a massive coverage expansion under the federal healthcare law.

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.

Covered California, the state agency implementing the federal Affordable Care Act, is announcing the winning bidders and proposed rates Thursday for its insurance exchange, where as many as 5 million residents are expected to shop for coverage next year.

The state has picked a group of health plans for each of 19 regions across California. The insurers will be selling policies with uniform benefits packaged in four broad categories of coverage. For the first time in the individual market, consumers will be able to make easier price comparisons among companies.

But the threat of higher premiums in next year's revamped market has been a major concern for policymakers who can't risk alienating too many middle-income, healthier customers who are needed to offset the increased costs of covering sicker, poorer people who have been shut out of the healthcare system for years.

UnitedHealth, Aetna and Cigna are small players now in California's individual health insurance market. More of their business is focused on large employers, where most Californians receive their health coverage. But the companies signaled a wait-and-see approach on these new government-run marketplaces.

Together, in 2011, those three big insurers had 7% of California's individual health insurance market, according to Citigroup research. In contrast, Kaiser, Anthem Blue Cross and Blue Shield had nearly 87%, collectively. Anthem Blue Cross is a unit of WellPoint Inc., the nation's second-largest health insurer.

Peter Lee, executive director of Covered California, declined to comment on specific companies ahead of Thursday's announcement. But he rejected any criticism that diminished competition could lead to higher premiums and fewer choices....

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