California Rejects UnitedHealth’s Bid to Sell Obamacare Statewide

California’s Obamacare exchange rejected a bid from the nation’s largest health insurer to start selling coverage statewide next year.

The Covered California board adopted new rules Thursday that sharply limit where industry giant UnitedHealth Group Inc. could offer policies to individuals.

Many consumer advocates backed the exchange’s decision. But California Insurance Commissioner Dave Jones panned it, saying Californians deserve more choice and competition statewide.

Covered California’s move to limit UnitedHealth could be a boost to the four largest health insurers already in the exchange. Led by Anthem Inc., they accounted for 94% of state enrollment in the first year.

The earliest UnitedHealth could sell statewide is now 2017. Covered California’s decision came Thursday afternoon, and the company didn’t comment on its immediate plans.

UnitedHealth had a chance to join Covered California when it launched in the fall of 2013 as part of the health-law rollout. Instead, the company exited California’s individual insurance market and bypassed most of the Obamacare exchanges nationwide.

Peter Lee, executive director of Covered California, said established insurers shouldn’t be free to come in right away. Those insurers, he said, should not be allowed to undercut rivals who stepped up at the start and made significant investments to sign up 1.2 million Californians during the first open enrollment.

Thursday, the state said more than 228,000 people had newly enrolled since Nov. 15, when the latest open enrollment began. It ends Feb. 15.

“United or other plans that were in the market in 2012 should have a higher bar” to joining the state exchange, Lee said. “We think the health plans that helped make California a national model should not be in essence undercut by plans that sat on the sidelines.”

The board’s newly adopted rules said UnitedHealth and other insurers that were operating prior to the health-law rollout are allowed to serve in only five of the state’s 19 regions where there are fewer than three health plan choices.

Those areas are predominantly rural counties in Northern California, but they also include areas of Santa Barbara and San Luis Obispo counties.

Newly licensed health plans could apply to sell anywhere in the state. New York start-up Oscar Insurance Corp. fits that description, and it has expressed interest in selling policies in Covered California starting next year.

Insurers must notify the exchange of their interest for selling in 2016 by Feb. 16. It’s up to Covered California whether to allow companies into its state-run marketplace.

Insurance chief Jones has repeatedly criticized the exchange for a lack of insurers in some areas. He reiterated that concern in an interview Thursday and said Covered California was favoring its existing insurers at the expense of consumers.

“Covered California’s decision to substantially restrict where new health insurers can sell in 2016 protects the big health insurers’ market share and hurts consumers by denying them additional choices,” Jones said. The exchange “ought to be encouraging, not discouraging, new insurers to come in.”

In addition to securing lower rates, Jones pointed out that adding health plans could offer consumers a wider choice of doctors and medical networks. Many Californians have expressed dissatisfaction with the limited number of doctors and hospitals on some Obamacare plans.

Before Thursday’s meeting, Brandon Cuevas, chief executive of UnitedHealthcare of California, had urged the exchange to support expansion and not limit companies to certain markets.

“We are prepared to enter the market statewide,” he said in a letter to the board. That would include, he said, “all regions for both the health benefit exchange and small business health options program, including those where little or no choice currently exists for consumers.”

“We understand the hesitancy that our competitors may have as well as the exchange board to allow new entrants prior to 2017,” Cuevas said.

After first taking a wait-and-see approach to Obamacare, UnitedHealth now participates in 23 state exchanges across the country.

UnitedHealth’s proposal also faced opposition this week from consumer and labor groups over the company’s marketing of a bare-bones health plan to large employers.

Consumer group Health Access and the California Labor Federation asked the exchange to ban participating health plans from offering those “skinny” policies.

The two groups cited UnitedHealth marketing materials promoting the skinny health plans as a way for employers to skirt requirements of the Affordable Care Act for minimum coverage and avoid some federal penalties.

UnitedHealth didn’t comment on the criticism of its skinny health plans. It has defended them in the past as a product that some customers want.

The company announced it was exiting California’s individual health insurance market in fall 2013, just prior to the launch of the Affordable Care Act. It canceled its remaining policies at the end of that year.

UnitedHealth continued to serve California employers and workers. The company covers more than 3.1 million Californians.

Also Thursday, the state said it’s seen a strong turnout thus far among Latinos, who make up a large portion of the state’s uninsured.

Officials said 28% of new enrollees as of Jan. 12 identify as Latino. That’s ahead of where the exchange was at the midpoint of the initial open enrollment and similar to where it finished in April.

Source Link

arrowcaret-downclosefacebook-squarehamburgerinstagram-squarelinkedin-squarepauseplaytwitter-squareyoutube-square