UnitedHealth To Withdraw From State’s Individual Insurance Market

UnitedHealth Group has announced that it will stop selling individual health insurance plans in California at the end of the year, withdrawing as the Affordable Care Act begins to reshape the health insurance market in 2014, the Los Angeles Times reports.

Background

The health plan is the second large insurer to withdraw from the state's individual insurance market ahead of ACA implementation (Terhune, Los Angeles Times, 7/2).

Last month, Aetna announced that it would stop selling individual plans at the end of 2013, a move that will affect about 49,000 individual policyholders (California Healthline, 6/17).

UnitedHealth holds a 2% share of the California's individual market, while Aetna holds a 5% share.

UnitedHealth Announcement

UnitedHealth's decision will force about 8,000 policyholders to obtain new insurance.

The health plan will not be allowed to re-enter the state's individual market for five years, according to state regulators.

A UnitedHealth spokesperson said the company's "individual business in California has always been relatively small," adding that "over the years, it has become more difficult to administer these plans in a cost-effective way for our members."

Response to Announcement

Sabrina Corlette -- a research professor at Georgetown University's Center on Health Insurance Reforms -- said Aetna and UnitedHealth "have made the calculation that it required too much of an investment to change their strategy" under ACA implementation.

State Insurance Commissioner Dave Jones (D) said the move "means less choice, less competition and even more consolidation of the individual market" among other health insurers (Los Angeles Times, 7/2).