In an unexpected move today, SeeChange Health announced it will be pulling out of California and Colorado. (See their announcement here) This is both interesting and telling with regards to CA’s health insurance marketplace. First, the move is interesting because SeeChange only entered California in 2010. Also, they were one of the more creative and innovative carriers, making large investments in technology and putting preventive care at the center of their business. They did not make the traditional mistake that insurance companies make – enter a State, buy up market share with cheap rates and then take rate hikes in subsequent years – rather, they appeared to be taking the State patiently, a piece at a time, growing steadily in Southern California and moving northwards slowly.
The bad and possibly telling news is that our State, like all States, has a very limited number of carriers to choose from. Businesses who offer group health plans can choose from about 6 statewide carriers and a few regional carriers, like Western Health Advantage or Sutter Health Plus in our area. Compare that to other areas of insurance where there is a seemingly endless supply of carriers competing for your business – always a good thing for consumers. SeeChange’s departure means less competition, and in this case competition from a company that was quickly earning praise for its innovations.
California’s health insurance marketplace is undergoing an evolution like never before, and the mix of private and public demand on insurers, providers and ultimately, premium payers is evidence that our system is dangerously frail. Families and businesses who buy insurance are not only feeling the premium increases brought on by the direct mandates of the Affordable Care Act, they are indirectly subsidizing a growing MediCare and MediCal membership. One less carrier in the health insurance marketplace is not a good sign of the health of our system.