CareFirst BlueCross BlueShield, long the dominant health insurer in the mid-Atlantic region, has easily managed to hold on to that position in the competition on Maryland’s health insurance exchange, despite increased competition during the second enrollment period.
But that doesn’t mean the gap isn’t closing — at least slightly.
With 94 percent of the exchange’s market, CareFirst was overwhelmingly the leading insurer during the first open enrollment period, which began in October of last year.
But for the second open enrollment period, which began last month and lasts through mid-February, two more insurance companies jumped in and decided to sell individual policies on the exchange. The increased competition is having small but visible results: CareFirst is still the clear leader, but its market share has dropped to 83 percent, according to data from the Maryland Health Benefit Exchange.
Whether that gap will continue to shrink is anybody’s guess, experts said, but whatever happens will likely affect how well the exchange functions in the future and how important it is to the state’s overall insurance marketplace.
“Many health insurers will look at CareFirst’s dominance and see that, for instance, UnitedHealthcare [one of the new participants on the Maryland exchange], hasn’t gotten a lot of enrollees,” said Bradley Herring, director of the health economics and policy program at the Johns Hopkins Bloomberg School of Public Health.
“And they’ll say, ‘Well, what’s the point of entering the exchange if CareFirst is going to maintain this high market share?’”
Herring said that “for reasons not well understood,” it’s not uncommon for one or two carriers to persistently dominate a state’s insurance market, but that once a carrier rises to the top, it’s difficult to unseat that company.
“In some sense it’s a self-fulfilling prophecy,” Herring said. “CareFirst builds its market share because most people have bought it, and it becomes the norm for people around here to have that plan because everybody else has it.”
Then, Herring said, even with the introduction of new carriers hawking new plan offerings — regardless of the price — most people stick with what they know.
“It’s this inertia that develops,” Herring said. “People pick a plan because it’s what their friends and family have had, and then they just stay in it because they’re reluctant to switch.”
Representatives for CareFirst declined to comment for this story.
Peter Beilenson, CEO of Evergreen Health Cooperative, said he’s not surprised CareFirst has retained the top spot, given its widespread name recognition and long history of serving Maryland. Beilenson said he does, however, expect other carriers, particularly Kaiser Foundation Health Plan of the Mid-Atlantic States, to gradually chip away at CareFirst’s market share.
“As more competitive policies are developed that appeal to people who are newly covered or who want to participate in [a model called the Patient Centered Medical Home, which is offered by Kaiser and Evergreen], that will shrink CareFirst’s market share to some extent,” Beilenson said.
“But I certainly would not expect their market share to drop to 50 percent or something in the next several years,” he added. “I would be shocked.”
The two new carriers that joined the exchange in 2014 (to sell plans for 2015) are Cigna Health and Life Insurance Co. and UnitedHealthcare of the Mid-Atlantic Inc.
As of Sunday, 83,735 individuals had signed up for coverage with a private health insurer on the exchange since Nov. 15.
Cigna signed up just 222 of them, or 0.25 percent, according to data from the exchange.
UnitedHealthcare, together with its affiliate All Savers Insurance Co., has so far enrolled 2.6 percent of the signups since November. Officials with UnitedHealthcare and Cigna could not be reached for comment Monday.
Evergreen has signed up about 2.3 percent of exchange enrollees so far.
The second-place carrier, Kaiser, still trailed far behind CareFirst. Kaiser claimed 11.8 percent of the total, or 9,910 people. Still, that’s a significant improvement from last year, due in large part to Kaiser’s decision to reduce premiums for many of its plans.
CareFirst, on the other hand, raised premiums for its plans, anywhere from 9.8 percent to 16.2 percent, on average. The pricier plans could also be contributing to the company’s slipping market share.
Kaiser has its eye on further growth in Maryland. The company recently built new medical centers in Montgomery and Baltimore counties, expanded a facility in Largo and announced another coming to Baltimore city.
A Kaiser spokesman said in a statement that the company is “pleased” with its performance during open enrollment so far and that officials “are looking forward to continued growth in Maryland.”
CareFirst Inc. is a nonprofit insurance company serving the mid-Atlantic region and a licensee of the national Blue Cross and Blue Shield Association.
CareFirst is the parent company, or shared business name, of CareFirst of Maryland Inc., and Group Hospitalization and Medical Services Inc., which both sell insurance in Maryland. Another affiliate is CareFirst BlueChoice Inc.
In 2013, CareFirst generated $7.6 billion in revenue.