Covered California To Add Two Insurers to Individual Marketplace

July 28, 2015

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Source: California Healthline

Insurers UnitedHealth Group and Oscar likely will start selling health plans through Covered California next year, the Los Angeles Times reports (Terhune, Los Angeles Times, 7/24).

Background
UnitedHealth had the opportunity to join Covered California in 2013 as the Affordable Care Act was rolled out. However, the insurer left the state’s individual health insurance market and decided not to participate in most of the ACA exchanges across the country.

Since then, the insurer has expanded into several exchanges nationwide. In January, Covered California rejected UnitedHealth’s bid to sell coverage to individuals statewide.

That month, the exchange also adopted new rules limiting where insurers that already are established in the state but not yet participating in the exchange can offer health plans. Under the policy, such insurers can apply to sell individual coverage but only in underserved areas.

For example, insurers that were operating in California before the ACA rollout can sell coverage only in five of the state’s 19 regions, in which there are fewer than three coverage options (California Healthline, 1/16).

Details of New Insurer Options
According to a filing with state regulators, UnitedHealth plans to sell policies through Covered California in those five regions, which largely include rural counties in Northern California, as well as Santa Barbara, San Luis Obispo and Ventura counties, the Times reports.

UnitedHealth also plans to sell coverage across the state outside of the exchange, according to the Times.

Meanwhile, Oscar — which currently offers policies in New York and New Jersey — intends to sell coverage to a larger market in Southern California, including Orange County and parts of Los Angeles County, the Times reports.

The startup insurer allows plan members to speak with physicians on the phone any time at no cost. It also gives all of its members a no-cost fitness tracker that lets individuals win cash rewards based on the number of steps they have taken.

Oscar also will offer plans outside of the exchange.

Implications
According to the Times, the addition of the two insurers to California’s market could raise competition among health plans and keep premiums lower.

The plan to add the two insurers to the market comes just before the state exchange is expected to announce its 2016 premium rate increases, which could be in the double digits for some California consumers.

Meanwhile, some consumers criticized Covered California for a lack of options when the ACA first rolled out.
Reaction

The plan to limit UnitedHealth to just a few smaller markets has drawn some criticism, the Times reports.

Jamie Court, president of Consumer Watchdog, said, “It’s really outrageous Covered California would limit competition for [Anthem Blue Cross and Blue Shield of California],” the state’s largest insurers. He added, “Most states would be begging health insurers to come in.”

However, Anthony Wright, executive director of Health Access, said that he supported the exchange’s decision to limit the areas in which UnitedHealth can offer policies.

He said, “It’s good to give those areas some relief. Adding UnitedHealth to the [Los Angeles] market, which already has a bunch of plans, doesn’t add a lot of value” (Los Angeles Times, 7/24).

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