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United Healthcare to exit California’s individual insurance market

Health insurer United Healthcare has decided to stop marketing of individual insurance policies in California after 2013 as it intends to concentrate on its core business of group plans for large and small employers.

Commenting on the United Healthcare exit plan, State Insurance Commissioner Dave Jones said that the reduced competition will hurt consumers, who require buying health insurance in 2014.

United Healthcare’s decision to exit the California individual health insurance market is bad news for consumers as they will have less choice, less competition, and more market consolidation by Anthem Blue Cross, Blue Shield of California, and Kaiser, Jones added.

A statement by United Healthcare was quoted by The Associated Press as saying, "Our individual business in California has always been relatively small and we currently serve less than 8,000 individual customers across the state."

"Over the years, it has become more difficult to administer these plans in a cost-effective way for our members in California," the statement added.

California HealthCare Foundation 2011 data reveals that Anthem Blue Cross, Blue Shield and Kaiser occupy 87% of the individual healthcare market.

Through its subsidiary PacifiCare, United Healthcare had approximately 10,000 individual policyholders in late 2012.