UnitedHealthcare to stop selling individual plans in Calif.

SACRAMENTO, Calif. – A second health insurer notified state regulators Tuesday that it will stop selling individual policies in California.

UnitedHealthcare announced it will no longer offer individual insurance plans after the end of the year. It will focus instead on its core business of group plans for large and small employers.

"Our individual business in California has always been relatively small and we currently serve less than 8,000 individual customers across the state," the company said in a statement. "Over the years, it has become more difficult to administer these plans in a cost-effective way for our members in California."

The announcement comes two weeks after Aetna Inc. said it also plans to exit California's individual insurance market. Both insurers avoided participating in the state exchange that is being established as part of the Affordable Care Act.

State Insurance Commissioner Dave Jones says the departure of UnitedHealthcare and Aetna is bad news for consumers.

"While both UnitedHealthcare and Aetna have a very small share of California's individual health insurance market, their departure means less choice, less competition, and more market consolidation by the remaining big three health insurers -- Anthem Blue Cross, Blue Shield of California, and Kaiser -- which means an increased likelihood of even higher prices from those health insurers downstream," Jones, a Democrat, said in a statement.

According to 2011 figures compiled by the California HealthCare Foundation, Anthem Blue Cross, Blue Shield and Kaiser have 87 percent of the individual market.

Starting Oct. 1, those seeking to buy their own health insurance will be directed to Covered California, the state's new exchange, where 13 insurance carriers will sell individual policies.

Aetna and UnitedHealthcare chose not to participate in the exchange.