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Evergreen’s demise creates possibilities for new insurers in Md.

Maryland Insurance Commissioner Al Redmer. (File)

Maryland Insurance Commissioner Al Redmer. (File)

New companies looking to enter the Maryland individual insurance market could find an easier path with the collapse of Evergreen Health this week.

Any new Maryland carrier would have to build infrastructure in the state before selling plans. That infrastructure includes creating a provider network, a distribution channel and product and pricing models.

Evergreen’s assets would provide investors an opportunity for a head start.

“I have spent a lot of time in the last two years trying to recruit carriers to Maryland,” said Al Redmer, Jr., the Maryland Insurance Commissioner. He wants to promote more competition on the Maryland insurance exchange.

The insurance administration has begun the process of placing Evergreen in receivership. Once in receivership, Maryland can sell the insurer’s assets, potentially allowing another investor or insurance company to enter the market.

Evergreen’s old investors — LifeBridge Health, Anne Arundel Health System and JARS Health Investments — could build a new company out of the ashes. In their statement announcing they were backing out of the Evergreen deal, the investors left open the possibility of creating a new provider-sponsored insurer in the state.

Outside investors and insurers could also take over the remains of Evergreen. Redmer specifically mentioned the possibility of a venture capital-backed insurance company.

“There are a few young startup health insurers with venture capital money that have expanded in different areas,” he said. “This could prove to be an easy access into a market by acquiring an existing company.”

Oscar Health has been a prominent example of a young health insurance company expanding into states where individual health exchanges have lost insurers. In particular, the company has expanded into northeast Ohio and the Nashville area, two regions that would have been without insurers in 2018.

The company raised $400 million during a fundraising round last year.

While Redmer cited political uncertainty as a reason companies have been reluctant to expand into Maryland, Oscar has embraced the uncertainty.

“Why seek to expand in a time of uncertainty?” wrote CEO and co-founder Mario Schlosser in the company’s “road map” for 2018. “We’re confident that when the dust settles, the market for health insurance will stabilize in time for 2018.”

Redmer said he’s had some preliminary talks with the company.

“They are interested in growing and expanding,” he said. “They’ve been interested enough for us to have a couple of conversations.”

An Oscar spokesman said he could not comment on specific conversations with states and that it is too early to discuss potential 2019 plans.

Oscar started in the New York region and there are a couple of other regional startup insurers that could start looking to expand. Zoom+ has operated in the Portland, Oregon, area and Bright Health has operated out of Colorado but will start selling Medicare Advantage plans in Alabama next year. Neither company responded to a Daily Record request for comment.

In 2018, Centene and Medica also expanded into states with “dry” counties, counties without a single insurer on the exchange. While Medica didn’t stray outside of its Midwest geographic footprint by covering Iowa, the St. Louis-based Centene covered dry counties in Nevada.

The companies did not respond to a request for comment.

UnitedHealthcare could also be a possibility. The insurer left the Maryland exchange for 2018, but it still offers employer plans in the state. It also left the door open to returning in its letter pulling out of the exchange. United did not respond to a Daily Record request for comment.

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