Three major health insurers flee California’s ObamaCare exchange

posted at 10:41 am on May 23, 2013 by Ed Morrissey

Remember the claim that “if you like your plan, you can keep your plan” under ObamaCare?  That was never actually true, as many who had low-cost catastrophic coverage married with HSAs will have to abandon them for more-costly comprehensive plans under the ACA’s coverage mandates.  In California, it’s even less true as three insurers with millions of subscribers opt out of the state-run ObamaCare exchange:

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. …

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.

Winning bidders?  Yes, these exchanges aren’t actual marketplaces, where providers compete on prices and services.  Insurers had to bid their plans into the exchanges rather than to consumers, and only those whose prices met Covered California’s arbitrary standards are allowed to offer their programs to people without employer-based coverage.

That was enough for the three insurers to take a pass on the exchange altogether:

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.

This doesn’t impact their employer-based coverage — at least not yet.  The exchanges exist for those who have to buy their coverage individually rather than as part of a group.  However, as the incentives for employers to dump coverage increase as premiums skyrocket, more and more Californians will be forced into these exchanges and onto federal subsidies to pay for the cost themselves, which will make it more expensive for everyone but the employers, and provide less choice for the consumers.

Covered California denies that fewer choices in the exchange means, er, fewer choices:

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.

“There will be plenty of price competition for California consumers,” Lee said in an interview Wednesday. “They will be benefiting from robust competition.”

Clearly, that’s not what’s happening here.  The three companies that control 87% of the individual market now will soon control nearly 100% of it.  Thanks to the terms of the exchanges, the kind of plans they can offer also have to be restricted to comply with ObamaCare mandates, and the price controls placed on the entry to the market will limit choices even more.  One of the biggest problems in the pre-ObamaCare environment was a lack of choices thanks to barriers to interstate sales of insurance plans, and at least in California, the “solution” has made that problem even worse.

Just wait until ObamaCare comes to your state.

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UnitedHealth, Aetna and Cigna are small players now in California’s individual health insurance market.

IRS Alert!

fogw on May 23, 2013 at 10:44 AM

Nancy Pelosi will be unaffected by any of this.

Cicero43 on May 23, 2013 at 10:46 AM

Good. Bring Obamacare to its knees. Cripple it. Kill it.

Charlemagne on May 23, 2013 at 10:47 AM

I’m a doctor. The reason Highmark/ blue shield products could stay is because they charge huge premiums and pay doctors and hospitals often half of what other insurers pay.

Redglen on May 23, 2013 at 10:48 AM

OSHA too.

forest on May 23, 2013 at 10:48 AM

Just wait until ObamaCare comes to your state.

Live in MD.

Already has.

Gatsu on May 23, 2013 at 10:50 AM

I sure hope Obamacare just crashes under its own weight…sure looks like that’s happening. John Roberts be damned!

kirkill on May 23, 2013 at 10:50 AM

If I were an insurance company CEO I would actively work to cripple Obamacare by whatever means necessary and dare Sebelius to threaten my business. I would never take 1:1 calls, I would record all conversations with government officials, and keep hard copies of all emails and letters.

Charlemagne on May 23, 2013 at 10:51 AM

Some group needs to start funding and running TV spots – targeting low information voters
about how bad ObamaCare will be for THEIR health…..

http://reason.com/blog/2013/05/22/the-obamacare-nightmare-scenario

Copy:
“Do you know who voted for ObamaCare?
Democrats – no one vote from Republicans.
Maybe the Republicans know something the democrats don’t?”

Use ObamaCare as a bludgeon to wack the democrats over the head until they are gone.

redguy on May 23, 2013 at 10:51 AM

I sure hope Obamacare just crashes under its own weight…sure looks like that’s happening. John Roberts be damned!

kirkill on May 23, 2013 at 10:50 AM

That’s perfect for the democrats – they will blame the Chief Justice who Bush nominated – for the failure of ObamaCare – because he was the one that breathed new life into it.

redguy on May 23, 2013 at 10:53 AM

to me this is a non issue.these three named at the top of this post combined only had 7 percent of the entire california individual market. i actually read the entire article

what will most likely happen in states is that the insurers that have the bulk of that state market already will have plans in an exchange because they already have the networks in a particular area.

the three named above are going into some state exchanges were they already have substantial networks.

it makes sense. if they already have a network they can market plans on an exchange with a few extra restrictions from their already existing networks.

there are many reasons not to want obamacare-but this one is not one of them.

gerrym51 on May 23, 2013 at 10:53 AM

Let liberals who voted for Obama and still love him suffer for once like they tend to make everyone else. This is the first time the Left has ever had to actually pay for something they wanted and foisted on everybody but them; in the past they had an escape from everything. Now, they don’t.

“Welcome to the party, pal!”

Liam on May 23, 2013 at 10:53 AM

The left will never admit to being wrong on this.A huge s#!t storm is heading our way.An F-10.

docflash on May 23, 2013 at 10:53 AM

Clusterphuck.

This is what we get for putting economic matters in the hands of a guy who didn’t have an interest-bearing checking account before 2004.

This is Obama’s awesome multicultural studies background at work.

BuckeyeSam on May 23, 2013 at 10:54 AM

BREAKING: Three CA Health Insurance Companies Report Unnounced and Sudden IRS Audits

Good Lt on May 23, 2013 at 10:54 AM

I hope they have good coverage for broken legs.

forest on May 23, 2013 at 10:54 AM

Nancy Pelosi will be unaffected by any of this.

Cicero43 on May 23, 2013 at 10:46 AM

If stupid is a pre-existing condition, you’re right.

BacaDog on May 23, 2013 at 10:56 AM

Somebody help me out…is Obamacare at all possible able to be repealed with a GOP POTUS and/or majority of both houses?

JetBoy on May 23, 2013 at 10:57 AM

Unexpectedly…

workingclass artist on May 23, 2013 at 10:57 AM

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.

“There will be plenty of price competition for California consumers,” Lee said in an interview Wednesday. “They will be benefiting from robust competition.”

Welcome to the World of Delusional Rectumtude.

These people say whatever the Hell they want, to justify
anything they want..the Real World to them, is whatever
they say it is at that moment….

ToddPA on May 23, 2013 at 11:03 AM

I love it when a plan comes together.

jukin3 on May 23, 2013 at 11:05 AM

So does this mean that gay couples in California won’t be getting their fertility treatments covered by state mandate?

gwelf on May 23, 2013 at 11:06 AM

Ahm fr’m Texas.

Long as the state’s still red, we all will be fightin’ Obamacare.

(And that fight may keep the state red, despite predictions it will go purple.)

No Truce With Kings on May 23, 2013 at 11:06 AM

Somebody help me out…is Obamacare at all possible able to be repealed with a GOP POTUS and/or majority of both houses?

JetBoy on May 23, 2013 at 10:57 AM

I, for one, tend to believe anything is possible. In this case, it has advanced so far and already gotten so big it will be very difficult to repeal. As time goes on, and I don’t think there’s a lot of time, it might well be practically impossible given how government works. They never repeal or terminate a program, except those of the military, like the F-22. We still have the Helium Fund, from the the 1930s, where Congress wanted to be sure America had enough helium for blimps. What military branch uses blimps these days except on a small scale?

Given the way government works, I imagine they’ll only try tweaks and ‘fixes’ that will amount to nothing. It’s not that any bad law can’t be repealed. What’s always missing from politicians is the will to do it.

Liam on May 23, 2013 at 11:07 AM

That’s perfect for the democrats – they will blame the Chief Justice who Bush nominated – for the failure of ObamaCare – because he was the one that breathed new life into it.

redguy on May 23, 2013 at 10:53 AM

..and, the way things are going, the mirror-fogging low-info proles will eat it up and hand Hillary eight years after the rat-eared bastage leaves the scene.

The War Planner on May 23, 2013 at 11:07 AM

Welcome to the World of Delusional Rectumtude.

These people say whatever the Hell they want, to justify
anything they want..the Real World to them, is whatever
they say it is at that moment….

ToddPA on May 23, 2013 at 11:03 AM

Yup, sounds like my teenage sons….

We are being ruled by teenage brats.

redguy on May 23, 2013 at 11:08 AM

I love it when a plan comes together.

jukin3 on May 23, 2013 at 11:05 AM

Just wait until actual healthcare follows the A-Team mercenary model.

gwelf on May 23, 2013 at 11:10 AM

Just wait until ObamaCare comes to your state.

You mean Minnesota? Yeah, I can wait. My halfwit state government is peeing itself in anticipation, they can hardly stand having to hold off on sticking their grubby, clawed paws into yet another facet of our lives.

Bishop on May 23, 2013 at 11:10 AM

Ahm fr’m Texas.

Long as the state’s still red, we all will be fightin’ Obamacare.

(And that fight may keep the state red, despite predictions it will go purple.)

No Truce With Kings on May 23, 2013 at 11:06 AM

And the irony is – BCBS in Texas runs the insurance risk pool.
It was set-up for people like me who could not get health insurance for
pre-exising conditions. It works great. My medication costs $1200 per month.
I pay about $330 per month for the insurance.
I had a company, I covered at one time up to 12 people.
I sold the company and when I tried to get new health insurance I was denied.
One insurance guy told me about the risk pool and I was accepted.
The service is great and I have no complaints. I am sure ObamaCare
will come in and screw this all up…..

redguy on May 23, 2013 at 11:12 AM

I am sure ObamaCare
will come in and screw this all up…..

redguy on May 23, 2013 at 11:12 AM

I wouldn’t doubt it. Obama would screw up a bathroom break.

Liam on May 23, 2013 at 11:16 AM

Who could have predicted?
Mess with the market, market costs go up.
Answer?
Mess with the market some more!

Fools and Tools, the lot of them.

JusDreamin on May 23, 2013 at 11:17 AM

All of our liberal neighbors in la la land have been strangely quiet lately. With all of this bad news suddenly coming out of DC. I can never say “I told you so” though. They’re still my neighbors. I know they would never give me the same consideration if I were in their shoes.(being WRONG). I guess that’s the difference between right & left. I still think they are good people that are ill informed. They think that I’m a bad person since I don’t agree with them. Meanwhile I’m forced to live with the results of their bad ideas everyday. Ain’t it grand?

LeftCoastRight on May 23, 2013 at 11:18 AM

I guess that’s the difference between right & left. I still think they are good people that are ill informed. They think that I’m a bad person since I don’t agree with them. Meanwhile I’m forced to live with the results of their bad ideas everyday. Ain’t it grand?

LeftCoastRight on May 23, 2013 at 11:18 AM

At some point, “ill informed” is simply untrue when who they vote for – which is now more like their ghoulish, ignorant morals projected onto our political system – is blatantly corrupt and evil.

At some point we have to start calling people that they have CHOSEN to support a system which is downright wrong and they are either being deliberately obtuse or they WANT the wickedness. Because correct me if I’m wrong, but I’ve never heard of a liberal being forced to vote for the free-stuff party.

MelonCollie on May 23, 2013 at 11:20 AM

Arrrgh.

We are so screwed.

Bob's Kid on May 23, 2013 at 11:21 AM

If those three provided services to only 7% of the population in California – isn’t a bit of a distortion to say that Three Major Health Insurers Flee?

Hill60 on May 23, 2013 at 11:25 AM

I guess that’s the difference between right & left. I still think they are good people that are ill informed. They think that I’m a bad person since I don’t agree with them. Meanwhile I’m forced to live with the results of their bad ideas everyday. Ain’t it grand?

LeftCoastRight on May 23, 2013 at 11:18 AM

The system of the left is just downright corrupt. Let’s face it – it is a criminal enterprise run by criminals for the benefit of criminals. The only way to change it, is to burn it down.

redguy on May 23, 2013 at 11:29 AM

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.

In order words, their appeal is becoming more selective.

RSbrewer on May 23, 2013 at 11:34 AM

I am not really sure how Obamacare will effect me.
I am covered by Tricare …. retired Military.
that is my only coverage …. long story short ….
what are they going to try and do to me ….?

conservative tarheel on May 23, 2013 at 11:54 AM

These are the first.Many will follow.

logman1 on May 23, 2013 at 11:55 AM

Wait. WHO said, “if you like your plan, you can keep your plan”?

C’mon, Ed, call Obama out as a liar.

Remember the claim when Obama said that “if you like your plan, you can keep your plan” under ObamaCare? That was never actually true…

http://www.youtube.com/watch?v=DXqKp5B0ZLE

Fallon on May 23, 2013 at 12:11 PM

When your opponent hands you a club don’t stop swinging.
Anytime anyone anywhere complains about health care in any way, shape, or form-BLAME OBAMACARE!!!
It’s not like you can be rebutted. Hammer it into the ground. Be nice, but be consistent. Be sympathetic about how this overreach from the bureaucrats in DC is killing us all.
Everytime.
Make those progs choke on it. Dare them to justify this debacle.

questionmark on May 23, 2013 at 12:18 PM

No Obamacare exchanges in Indiana. Thank you Governor Pence!

HoosierStateofMind on May 23, 2013 at 12:30 PM

Our race to cuba and kenya standards of living has ratcheted up a notch.

acyl72 on May 23, 2013 at 12:51 PM

Whoever the GOP Nominee is for 2016, their campaign slogan is already written.

Just Undo It!

I would like to repeal everything that’s happened since Jan 20, 2009 12 PM EST.

Chris of Rights on May 23, 2013 at 12:57 PM

Some group needs to start funding and running TV spots – targeting low information voters
about how bad ObamaCare will be for THEIR health…..

http://reason.com/blog/2013/05/22/the-obamacare-nightmare-scenario

Copy:
“Do you know who voted for ObamaCare?
Democrats – no one vote from Republicans.
Maybe the Republicans know something the democrats don’t?”

Use ObamaCare as a bludgeon to wack the democrats over the head until they are gone.

redguy on May 23, 2013 at 10:51 AM

An excellent idea, but one that will not happen unless there is an outside-the-Beltway source of funding.

The key “tell” here is the fact that we all tacitly know that if anyone did this [And the above copy would only be one ad. There would have to be others giving specific examples.] the Institutional Republican party would start having kittens by the litter. They would go to war alongside the Democrats to shut it down. Would not want to be “mean-spirited” and actually openly oppose something the Democrats want.

The only ones who would be able to do this [and hopefully stand up to the combined Journo-List 2.0/Obama regime/Institutional Republican opposition] would have to be from the TEA Party/Patriot movement or the Libertarians. Do not put your faith in the actions of the Republicans. We have seen plenty of examples where Republican actions supported Democrats over TEA Party candidates running under the Republican label.

Subotai Bahadur on May 23, 2013 at 1:16 PM

Somebody help me out…is Obamacare at all possible able to be repealed with a GOP POTUS and/or majority of both houses?

JetBoy on May 23, 2013 at 10:57 AM

Assuming, and it’s a big assumption, that all Republicans would vote for repeal, then you would need a simple majority in the House and a super majority (60, to prevent a filibuster) in the Senate, and a GOP POTUS. The GOP has not had a Senate super majority since 1923 so that is not likely to happen therefore you will need a certain number of Dems on board as well.

Odysseus on May 23, 2013 at 1:23 PM

No Obamacare exchanges in Indiana. Thank you Governor Pence!

how do you not have an exchange either run by the state or federal government

gerrym51 on May 23, 2013 at 1:33 PM

http://www.in.gov/aca/

indiana exchange

gerrym51 on May 23, 2013 at 1:36 PM

UnitedHealth, Aetna and Cigna…

The new search words for IRS employees :) …

jimver on May 23, 2013 at 2:00 PM

Nancy Pelosi will be unaffected by any of this.

Cicero43 on May 23, 2013 at 10:46 AM

.
Ohhh … I think she will.

Once her constituents figure out how SCREWED they are, she will be greatly “affected.”

listens2glenn on May 23, 2013 at 2:38 PM

It’s now at the place where it is a daily thing to see some new big outfit who was originally all warm and fuzzy over Obamacare suddenly jumping ship.

Only reason I can come up is that someone IS taking the time to read what is REALLY in this thing, and they are fleeing like mad from what they just found out!

pilamaye on May 23, 2013 at 2:44 PM

When enough people figure out that THEY DON’T HAVE TO PURCHASE HEALTH INSURANCE, the whole thing will fall.

Remember, it’s an unenforcable tax, and nobody can be penalized for not purchasing insurance and then refusing to pay the penalty/tax for not doing so.

The worst that the gubmint can do is write you a strongly-worded letter.

SCOTUS said so in their ruling – people forget that.

TeresainFortWorth on May 23, 2013 at 2:47 PM

We need to build a fence around Kalifurnia before all the nuts make a run for it to other states.

gregbert on May 23, 2013 at 3:01 PM

Capos who run you, into the ground.

Lois Lerner and Sebelius are your executioners.

Schadenfreude on May 23, 2013 at 3:05 PM

If someone lies in court or to Congress the punishment ranges from a misdemeanor and a fine to capital punishment for causing a person to be wrongly executed. If a series of elected political hacks do the same thing to the people of the United States of America (such as blatantly lying about the efficacy of the ACA) the punishment is that those who were lied to are punished. The offenders gent pay raises and call their detractors names.

I think it’s time that we the people of the United States of America sue the lawmakers who are responsible for lying about how the ACA will give everyone more choices and will bring down the costs because of competition. We all know there are less choices and the eventually cost will force those with excellent health coverage to accept inferior limited providers. Of course those on the good-old-boy side of the government (cabal) get what they want at the expense of others.

I don’t know how to start the process. Anyone have any ideas?

HHW on May 23, 2013 at 3:09 PM

gerrym51 on May 23, 2013 at 10:53 AM

Partially true – the market leader in most states is pretty much forced to offer am exchange product just to protect their market share. The other competition will bow out initially and then come in late to try and foist the expensive lives on the market leader. They will guess they will get a better underwriting profile when they are the new thing. We will see if they are right.

Realize that at least UHC is very much tied to Obamacare through their affiliation through AARP’s health offering as well as their tie in with hospital’s ACO model loosely based on the PPACA regulations.

Zomcon JEM on May 23, 2013 at 3:12 PM

In charge of your medical records.

Schadenfreude on May 23, 2013 at 3:17 PM

I don’t know how to start the process. Anyone have any ideas?

HHW on May 23, 2013 at 3:09 PM

Elected officials are generally granted immunity to those types of lawsuits. The theory is that voters will hold them accountable at the ballot box. Unfortunately, the electorate in this country is broken.

trigon on May 23, 2013 at 4:20 PM

http://www.in.gov/aca/

indiana exchange

gerrym51 on May 23, 2013 at 1:36 PM

Good luck with that. The most basic paperwork and processes haven’t even been started by that azzhat sebilius. If you think you’ll actually have something to enroll in by 10/1/13 then you also believe in unicorns and renewable energy powering our country in the next decade.

of course, don’t worry. Our ruling elite, government workers the unions and, of course, DNC donors have been granted exemptions so they’ll be fine. That’s all that really counts isn’t it?

acyl72 on May 23, 2013 at 5:35 PM

gerrym51 on May 23, 2013 at 1:36 PM

Actually – there is no exchange in Indiana – as in a public exchange run by the State or Feds.

There will be a private exchange – which many will not utilize because it will not be eligible for tax credits.

Now the Feds are rushing to put something together and it looks like the hospitals are going to be the navigators nationwide. The application is ridiculous, and the infrastructure non-existent. In addition, there are probably going to be court cases by employers who will maintain since there is no state exchange, no tax subsidies are allowed and therefore the employers cannot be taxed. We will see where that all ends up.

Zomcon JEM on May 23, 2013 at 5:42 PM

Everything being revealed about this lame law, and the costs to implement and maintain it makes it even more unbelievable that the Supreme Court upheld it. Whose side are they on?

stacman on May 23, 2013 at 6:19 PM

Everything being revealed about this lame law, and the costs to implement and maintain it makes it even more unbelievable that the Supreme Court upheld it. Whose side are they on?

stacman on May 23, 2013 at 6:19 PM

The Supreme Court didn’t want any trouble from the WH mob so they caved.

virgo on May 24, 2013 at 2:29 AM

The only way to save the country currently is:

1. Impeach Obama.
2. Repeal Obamacare.
3. Abolish the IRS.

If those measures are not taken soon, then we are sunk.

Theophile on May 24, 2013 at 2:50 AM

House impeaches, but the Senate convicts and removes.
To get rid of bumbles we must have a super majority in the senate.

losarkos on July 20, 2013 at 7:10 PM