Uh, oh: UnitedHealth to leave California's individual insurance market

As Ed reminded us on Monday, ObamaCare is going to mean higher health insurance premiums for the many Americans who will be required to take on pricier, more comprehensive plans that they don’t necessarily want or need in order to subsidize the higher-risk insurance pools that the health-care overhaul is forcing upon the populace by design. In California, the first state that eagerly jumped on the ObamaCare bandwagon, state officials have been mighty disgruntled at insurers  that have been considering raising their health-insurance rates above what the state believes to be fair and reasonable prices.

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It turns out, however, that the entire regulatory-administrative kit and kaboodle is beginning to cost at least a few major insurers more trouble than it’s worth: Earlier this year, UnitedHealth, Aetna, and Cigna all announced they will not be participating in California’s state exchange for individuals; and in June, Aetna announced that they were opting out of the individual insurance market altogether and instead focusing their business energies on providing insurance plans through large and small employers. Now, UnitedHealth is following suit, via the LA Times:

The nation’s largest health insurer, UnitedHealth Group Inc., is leaving California’s individual health insurance market, the second major company to exit in advance of major changes under the Affordable Care Act. …

UnitedHealth said it had notified state regulators that it would leave the state’s individual market at year-end and force about 8,000 customers to find new coverage. Last month, Aetna Inc., the nation’s third-largest health insurer, made a similar move affecting about 50,000 existing policyholders. …

The moves illustrate how different companies are responding to a major overhaul of the health insurance market for millions of consumers. Starting Jan. 1, the federal healthcare law forces insurers to accept all individual applicants regardless of their medical history and provide a comprehensive set of benefits with limits on patients’ out-of-pocket spending.

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Oh, goodness — the Obama administration has been making the completion of the more than thirty federally-run individual insurance exchanges their top priority before the intended deadline, at the expense of some of the law’s other promises. Insurers in the law’s most enthusiastic state are already losing interest in being a part of it, and severely doubt that we’ve heard the last of it. Especially in light of the news earlier this evening that the employer mandate is getting delayed until 2015, they have definitely created a monster — and it just keeps getting scarier.

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