Health insurance companies choose to opt out of exchange program
California’s health insurance exchange, called Covered California, is beginning to take shape as it inches closer to becoming fully active at the end of this year. The exchange has been accepting policy applications from numerous health insurance companies throughout the state, all of which seem eager to participate in the exchange system. Three of the state’s largest insurers, however, have decided to opt out of the exchange program, at least for the first year of its operation.
Decision could limit health insurance options
UnitedHealth, Cigna, and Aetna have decided to sit on the sidelines and observe the state’s health insurance exchange for the time being. The insurers are free to opt out of participating in the exchange as neither state nor federal law makes their participation mandatory. This could have an impact on the health insurance options that are available to Californians, however, as the exchange will now see the majority of its policies come from equally large insurers Kaiser Permanente and Anthem Blue Cross Blue Shield.
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California to be a testing ground for Affordable Care Act
California is expected to be one of the most important testing grounds for the Affordable Care Act in the country. If the state’s health insurance exchange can succeed in providing affordable health insurance policies to consumers without having these policies sacrifice coverage benefits, it may help dispel much of the controversy surrounding the federal law. The policies offered through the exchange are to adhere to benefits standards that have been developed by state officials.
Insurers focus primarily on large businesses that will not receive coverage through exchange
The state’s health insurance exchange is designed to cater primarily to the individual market, offering a place for low-income consumers and those with pre-existing medical conditions to find the coverage they need. This may be why UnitedHealth, Cigna, and Aetna have chosen to opt out of the exchange, as the majority of their business comes from large employers that will not seek coverage plans through the state’s health insurance exchange.