UnitedHealthcare is exiting California's individual market, leaving about 8,000 customers who'll have to find new coverage by the end of the year.
UnitedHealthcare, the nation's largest insurer, is leaving the individual market of the country's most populous state a month after Aetna announced it was also departing and ending coverage for about 50,000 individual members.
Both of the companies have had only modest presences in California's 2 million person individual market, which is mostly divided between Kaiser Permanente, Wellpoint's Anthem Blue Cross, and Blue Shield of California.
News of UnitedHealthcare's departure from California comes as the state aligns insurance regulations with the Affordable Care Act and about a month after Covered California, the state health insurance exchange, announced the 13 insurers selected to sell individual plans starting in October.
Thirty-three insurers had submitted applications to Covered California, to sell to a few million expected individual insurance consumers, with up to 7 million combined in the individual and small business segments.
The insurers that were selected for individual health plans, through what Covered California executive director Peter Lee called "active partnerships," are Almada Alliance for Health, Anthem Blue Cross, Blue Shield of California, Chinese Community Health Plan, Contra Costa Health Plan, Health Net, Kaiser Permanente, L.A. Care Health Plan, Molina Healthcare, Sharp Health Plan, Valley Health Plan, Ventura County Healthcare Plan and Western Health Advantage.
Both UnitedHealthcare and Aetna intend to continue selling small group plans, although it's not clear if they'll be selling in Covered California, which is set to announce small business SHOP insurers this summer.
As of 2011, UnitedHealthcare's small group market share in California stood at 6 percent, Aetna's at 10 percent and Anthem, Blue Shield and Kaiser each having about 20 percent, according to the California Health Care Foundation.
UnitedHealthcare and Aetna have both been cautious in their participation in state exchanges, the former tentatively set to sell in perhaps a dozen states -- the company isn't sure yet -- and the latter planning to sell in 14.