Is California's Move to Limit UnitedHealth Access Fair to Consumers?

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Covered California's leader says its decision is only fair to those insurers who took on the risk of a brand new marketplace in 2014. But the state's insurance commissioner says limiting choices is unfair to consumers.

Covered California yesterday issued rules that will limit where UnitedHealth Group can sell health coverage on the exchange under the Affordable Care Act, a controversial move that some consumer advocates backed as justified but the state’s insurance commissioner panned as unreasonable.

As issue is a tough regulatory question: is it fair to protect insurers who took a risk in an untested market—and perhaps enrolled the sickest customers—at the expense of offering consumers fewer choices for the time being?

That’s essentially what officials at Covered California have done. Because UnitedHealth bolted the state’s individual insurance market on the eve of ACA open enrollment in 2013, Covered California isn’t letting the payer back in all at once. Instead, rules adopted Thursday restrict any plan operating in the state in 2012 to 5 of 19 regions where there are fewer than 3 health plan choices.


That means that the 4 large health insurers who accounted for all but a sliver of the state’s exchange business last year will have it mostly to themselves through 2016, according to critics of Covered California’s move.

Exchange officials don’t see it that way. Plans that took the lead in signing up the 1.2 million consumers in the first year of the ACA should not be undercut by payers like UnitedHealth who waited on the sidelines and now want to join the exchange. UnitedHealth has joined 23 exchanges nationwide.

But the limited coverage options in certain parts of California have upset consumers, particularly those in remote areas who may need to be treated out of state in an emergency. In some parts of the state, Anthem Blue Cross was the only choice available in 2014. One press account chronicled the story of a patient whose Anthem pan covered his emergency care across the border in Nevada after he had a heart attack, but would not cover his follow-up visits with his regular doctor in nearby Reno, Nev.

Covered California’s Executive Director Peter Lee sounded unfazed in an interview about the 2015 choices. “In every corner of the state, consumers will have at least 2 plans to choose from.”

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