Anthem opts out of California's small business exchange

Anthem Blue Cross is pulling out of California's health insurance exchange for small businesses, becoming the first big insurer to opt out of the online marketplace.

As the largest insurer for small employers, Anthem's decision raises doubts about whether California can successfully establish a competitive exchange for small business employees. It also demonstrates insurers are least interested in participating in small business exchanges, reported the Los Angeles Times.

Anthem said it decided not to participate in California's small business exchange after the state last month relaxed a requirement that insurers selling plans in the individual exchange also had to bid to participate in the small business marketplace, Fox Business reported.

"That's really surprising and not a good thing for the exchange," Micah Weinberg, a senior policy advisor at the Bay Area Council, an employer-backed San Francisco group, told the LA Times. "Anthem is a very major player in the small-group market and you want a broad range of insurers, particularly the most compelling brand names."

But Covered California tried to soften the effect of Anthem's decision on the state's exchange. "We don't think it will have a huge impact," Covered California spokesman Dana Howard told the LA Times. "There are other companies that are just as big. This will be a competitive market."

California Insurance Commissioner Dave Jones responded to the news, saying Anthem is exiting the exchange "to avoid being excluded or to avoid further public debate or scrutiny about its rates." He was referencing his request in June that Anthem be barred from California's small business exchange.

Anthem said it will continue to offer health policies in the small group market outside of the exchange, and it still plans to participate in the state's individual exchange.

To learn more:
- read the Los Angeles Times article
- see the Fox Business article
- here's the insurance commissioner statement

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