California Health Exchanges Suffer As Major Insurers Pull Out

[Liz]

UnitedHealth Group, Aetna, and Cigna have now announced that they will pull out of California's individual insurance market. Immediately, only 58,000 consumers will have to find new insurers, but the reputational damage to Obamacare is more subjective and could be substantial.

Buh-Bye, California — UNH, AET, CI — Investing Daily

 

[Quotebroker]

CIGNA is out completely? I thought they were going off exchange only. I was interested to see their offerings given the additional flexibility that would have given them.

 

[djs]

Interesting article.... contradicts itself in a few places, almost to the point you think 2 people wrote the article, each writing every other paragraph.

For instance, you have:

While the immediate impact isn’t huge—about 58,000 consumers will now have to find new insurers—it’s problematic for Obamacare when three of the nation’s largest insurers won’t participate in the exchange. It’s a clear example of how certain aspects of Obamacare are forcing some insurers to make the strategic decision to exit more marginal markets.

Among those provisions scaring off insurers: the requirement that insurers must accept all applicants regardless of their medical history and caps on out-of-pocket spending.

then you have:

Fears that insurance exchanges would devastate insurance company’s profits clearly seem to have been overstated and, so far, it looks like they should create a win-win situation for both consumers and insurance companies, although insurers will become increasingly choosy about which markets they operate in.

So, all the companies that presumably know what they are doing are leaving. They are being replaced with (government funded) startup insurers, who think they can make a buck....

It will be interesting.

Dan

 

[AllenChicago]

I don't see the source, but it looks like this commentator-analyst is about to blow a mental gasket due to all the conflicting ACA info he/she is getting hammered with.

But that's happening all over the country right now to a lot of people, but in and outside of our industry. Thanks for pointing out a perfect example of this, Dan.
-allen

 

[Yagents]

And smaller ones may not be "financially viable". Didn't know they had it in their terminology:

Why One Insurer Quit Covered California - California Healthline