CareFirst sees some members take advantage of less-expensive plans

The Carefirst Building in Owings Mills. (file)

More than 1,600 CareFirst BlueCross BlueShield members on the individual market heeded the insurer’s call to switch plans for 2019, potentially tapping into hundreds of dollars a month in savings.

While preparing its rates for 2019, CareFirst realized that thousands of its members in PPO plans were paying more for the same services they could receive in the insurer’s HMO plans. CareFirst encouraged members to take a look at their plan and see if they would be better off switching.

“Nearly 14 percent (1,604 people) of our individual members in Maryland took advantage of savings offered by switching from our PPO to our HMO products during open enrollment,” the insurer said in a statement. “CareFirst remains focused on providing affordable and accessible health care to its members and will continue to work with Maryland’s lawmakers and regulators to further stabilize prices in the state’s individual market.”

PPOs, or preferred provider organizations, allow members to see doctors outside of their insurer’s network. That means that people who take advantage of PPO plans are generally sicker. But the PPO pool also tends to have less stability.

When it analyzed its PPO and HMO networks, CareFirst found a 93 percent overlap between providers. Basically, those PPO members were receiving the same benefits for a significantly higher price.

“If there was a PPO member who all their care was provided in the HMO, and that would be their decision, their rate could be cut in half and their care would be unaffected,” Peter Berry, chief actuary at CareFirst, said at a rate hearing last year.

According to sample rates published for a 40-year-old, a PPO member’s monthly premium on a silver plan could be around $626 while an HMO member’s monthly premium could be around $383.

The CareFirst plan was to maximize the impact of the reinsurance waiver that led to decreased premiums across the board in the individual market.

To encourage PPO members to consider switching, CareFirst launched an education campaign. It reached out to members directly and also used advertising to ask them to take a look at the difference between the two plans.

Ultimately, enrollments on the individual market grew for 2019. After the open enrollment period ended last month, the Maryland Health Benefit Exchange said enrollment had increased 2 percent more than the 2018 enrollment.

While CareFirst remained the larger of the two insurers on the market, it lost members while Kaiser Permanente, the other insurer, grew subscribers. CareFirst’s total enrollment dropped about 2 percent while Kaiser’s enrollment grew about 8 percent, the exchange said.