First Aetna, and now UnitedHealth.
United, the nation's largest health insurer based on enrollment, followed in the footsteps of Aetna's move last month and decided to exit California's individual market. That includes leaving the state's individual health insurance exchange after saying it would participate, the Los Angeles Times reported Tuesday.
While at first glance the two big insurers' departures make it look as if consumers in the Covered California marketplace will lose two key insurance options, it doesn't necessarily mean their choices will be significantly narrowed or that premiums in the exchange will go up due to less competition. Neither insurer was a big player in the Golden State in the individual market. Aetna currently has only 50,000 members. According to 2011 data from Citigroup, Anthem Blue Cross, Kaiser Permanente and Blue Shield of California effectively control the state's individual market, with an 87% market share.
Already, all the major national carriers have said they will only participate in exchanges where they know they can be competitive. And even in states where they have said they will be in the exchanges, insurers already are getting a feel for competitors' pricing as 2014 rate proposals are being publicly released. And if one carrier sees another carrier pricing much more aggressively than they are, it may make sense to just walk away.
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