Dive Brief:
- California's ACA exchange rejected a bid from the nation's largest health insurer to start selling coverage statewide next year. The Covered California board adopted new rules Thursday that sharply limit where industry giant UnitedHealth Group Inc. could offer policies to individuals.
- Covered California's move to limit UnitedHealth could be a boost to the four largest health insurers already in the exchange. Led by Anthem Inc., they accounted for 94% of state enrollment in the first year.
- The board's newly-adopted rules said UnitedHealth and other insurers that were operating prior to the health law rollout are allowed to serve in only five of the state's 19 regions where there are fewer than three health plan choices.
Dive Insight:
UnitedHealth is essentially getting penalized for waiting to join Covered California.
Peter Lee, executive director of Covered California, argued that established insurers should not be allowed to undercut rivals who came in at the beginning and invested in signing up 1.2 million Californians during the first open enrollment, the Los Angeles Times reports.
"United or other plans that were in the market in 2012 should have a higher bar" to joining the state exchange, Lee said. "We think the health plans that helped make California a national model should not be in essence undercut by plans that sat on the sidelines."
The decision met with mixed reception; while many consumer advocates backed the decision, California Insurance Commissioner Dave Jones disagreed, saying Californians deserve more choice and competition statewide.