Source: California Healthline
More than 12,000 San Diego County residents must purchase new health plans next year following a decision by two insurers to withdraw from Covered California, the state’s health insurance exchange, U-T San Diego reports (Sisson, U-T San Diego, 8/3).
Background on Exchange
The exchange primarily will serve individuals and small businesses.
Supporters hope that the exchange will function similarly to websites like Amazon and Expedia so that users will be able to choose among various health plans through an easily navigable online store.
The exchange is expected to open for registration in October (California Healthline, 7/24).
Background on Insurers’ Decisions
In June, Aetna announced that it would stop selling individual plans in California at the end of 2013, a move that will affect about 49,000 individual policyholders (California Healthline, 6/17).
Aetna said that it has notified about 12,200 San Diego residents that they will need to purchase replacement health coverage prior to Dec. 31 (U-T San Diego, 8/3).
UnitedHealth Group also announced that it would stop selling individuals plans in the state, affecting about 8,000 of its policyholders (California Healthline, 7/2). It did not provide separate numbers for the San Diego region (U-T San Diego, 8/3).
UnitedHealth holds a 2% share of California’s individual market, while Aetna holds a 5% share (California Healthline, 7/2).
Both insurers said they chose to leave the individual market because of profit challenges.
In a statement, Aetna said it is “no longer able to meet the needs of our customers, while remaining competitive in the individual health insurance market.”
Similarly, UnitedHealth said “it has become more difficult to administer [individual] plans in a cost-effective way for our members.”
Comments
Marc Reynolds — vice president of payer relations at Scripps Health — said the change will be a “nonissue” for the individual insurance market in California because Aetna and UnitedHealth “weren’t very big players to begin with.”
However, he noted that “patients who are affected will definitely see it as an inconvenience.”
Devon Herrick — an economist and senior fellow at the National Center for Policy Analysis — said the moves could be indicative of a larger reluctance by insurers to participate in the ACA’s health insurance exchanges.
“There is a legitimate concern over how this will work and whether it will take a while to settle down,” Herrick said, adding that insurers are “losing nothing by waiting a year” before participating in the exchanges (U-T San Diego, 8/3).