UnitedHealth to withdraw from Calif.’s insurance marketplace

UnitedHealth to withdraw from Calif.’s insurance marketplace

UnitedHealth Group will not sell health insurance plans on California’s insurance marketplace in 2017, the health insurance provider announced on Tuesday.

However, UnitedHealth’s decision will have negligible effect on the Golden State’s insurance marketplace called Covered California because the insurer has less than 1,200 members this year. The figure stands for less than one tenth of 1 per cent of the state marketplace’s 1.4 million consumers.

The insurer’s existing customers will keep on having coverage through the end of 2016. Starting next year, they will have to select new coverage during the open enrollment period this fall.

When contacted, Covered California spokesperson James Scullary said, “We will learn in July whether any new plans will join Covered California or if any of our existing plans will expand their coverage areas, as they did in 2016.”

Citing losses in the marketplaces, the Minnesota-based health insurer announced earlier this year that it would stop selling health plans through ACA or Obamacare in 2017 in most of the 34 of states where it currently operates.

Blaming similar challenges in the recent past, more than a dozen nonprofit insurance cooperatives created through Obamacare have closed. They said they were overwhelmed by medical claims that they could not afford.