Aetna Inc. (NYSE:AET) has decided to cut out a small individual health insurance operation in California.
Reuters reported Saturday that Aetna had sent California Insurance Commissioner Dave Jones a letter notifying him of the decision.
Aetna plans to withdrawn from the California individual market Dec. 31, 2013, the company said in a statement.
"After reviewing our portfolio of individual health insurance plans in California, we have determined that we are no longer able to meet the needs of our customers, while remaining competitive in the individual health insurance market," the company said.
Aetna ended 2012 with 68,000 individual health plan insureds, and it accounted for just 7 percent of the state's individual health insurance market, according to the California Department of Insurance.
Although Aetna is shutting down the individual health insurance operation in California, the company will continue to sell health insurance to California employers. The company also will continue to sell life insurance, dental insurance and Medicare plans in the state.
Aetna has a total of about 1.5 million insureds in California.
The Patient Protection and Affordable Care Act (PPACA) is set to require the U.S. Department of Health and Human Services (HHS) and state agencies to set up exchanges, or individual health insurance supermarkets, by Oct. 1, 2013, to require carriers to sell individiual health insurance on a guaranteed issue basis, without taking personal health information other than age into account when setting prices.
PPACA also will impose other coverage requirements on companies in the individual market.
To meet California notice requirements, Aetna must tell the holders of its individual policies about the change 180 days before the withdrawal date.