Monday’s Wall Street Journal features an op-ed from Edie Littlefield Sundby, a stage-4 gallbladder cancer survivor who won’t be able to keep the coverage she currently has. Her insurer, United Healthcare, is pulling out of the individual health care market, forcing Sundby to find new coverage in California’s health care exchange.
But the plans available through Cover California don’t offer in-network coverage for all of the care Sundby needs. As a result, she has to choose between her two health care providers if she wishes to remain in-network. “Stanford has kept me alive — but UCSD has provided emergency and local treatment support during wretched periods of this disease, and it is where my primary-care doctors are,” she writes:
What happened to the president’s promise, “You can keep your health plan”? Or to the promise that “You can keep your doctor”? Thanks to the law, I have been forced to give up a world-class health plan. The exchange would force me to give up a world-class physician.
But Sundby shouldn’t blame reform — United Healthcare dropped her coverage because they’ve struggled to compete in California’s individual health care market for years and didn’t want to pay for sicker patients like Sundby.
The company, which only had 8,000 individual policy holders in California out of the two million who participate in the market, announced (along with a second insurer, Aetna) that it would be pulling out of the individual market in May. The company could not compete with Anthem Blue Cross, Blue Shield of California and Kaiser Permanente, who control more than 80 percent of the individual market. “Over the years, it has become more difficult to administer these plans in a cost-effective way for our members,” UnitedHealth spokeswoman Cheryl Randolph explained. “We will continue to keep a major presence in California, focusing instead on large and small employers.”
The two insurers were also operating at a tax disadvantage in the state. As California Insurance Commissioner Dave Jones explained, “One of the factors I believe contributed to this decision….is the special tax break that California law gives to Anthem Blue Cross and Blue Shield, which has allowed and continues to allow those two companies to avoid paying $100 million in state taxes a year.” “Aetna and United Healthcare don’t get the special tax break provided to Anthem Blue Cross and Blue Shield, and so they faced a major competitive disadvantage in California.”
And then there is the company’s own justification for leaving. “The company’s plans reflect its concern that the first wave of newly insured customers under the law may be the costliest,” UHC Chief Executive Officer Stephen Helmsley told investors last October. “UnitedHealth will watch and see how the exchanges evolve and expects the first enrollees will have ‘a pent-up appetite’ for medical care. We are approaching them with some degree of caution because of that.”
Get that? The company packed its bags and dumped its beneficiaries because it wants its competitors to swallow the first wave of sicker enrollees only to re-enter the market later and profit from the healthy people who still haven’t signed up for coverage.
Sundby is losing her coverage and her doctors because of a business decision her insurer made within the competitive dynamics of California’s health care market. She’ll now have to enroll in a new plan that offers tighter networks of providers as a way to control health care costs and offer lower premiums. Eleven insurers are participating in Covered California and for the first time they won’t be able to deny coverage to Sundby or any other cancer patients.