Blue Shield Dropping Many of Their Good Plans!

It has to do with the HIPAA GI plans in California.

Anthem tried to bail last fall by cutting off commissions on new HIPAA sales in CA eff 11/1/09. They backed off of that within a week (and won't say why, even to the RSMs) at the same time they retired the PPO Share plans.

They likely got regulatory approval from DMHC to change the HIPAA offerings for 2010 (very late) and replaced the primary seller on HIPAA (PPO HIPAA 1500) with HMO coverage. They had to retire the 1500 PPO Share plan in order to eliminate it from the HIPAA portfolio since it still constituted one of the "most popularly marketed" plans making it a required HIPAA offering.

This action on Jan 8th (announced on the 11th through the back door) pushed a large chunk of the new HIPAA enrollments to Blue Shield's 1500 Spectrum PPO.

Blue Shield saw the shift (prior years Anthem claims they were getting almost 80% of the HIPAA enrollments in CA)and realized that if they did nothing they were going to be getting that 80% on the Spectrum plan.

In retaliation, Shield killed the porfolio of Spectrum PPO plans to escape the same rules that governed Anthem for HIPAA plans. Since Shield is no longer offering the 1500 or 2000 after 3/1 (and thus they cannot constitute "most poplularly marketed plans" rule), they were able to re-allocate the HIPAA portfolio with a full change-out of plans to either higher deductible, HMO and/or the HSA 4000.

To understand the situation, a quick refresher in CA HIPAA requirements:

1. Each carrier selling IFP in California MUST provide it's two most popularly marketed health plans to the HIPAA pool for each registration (this translates to the highest premium earning plans)

2. Since many carriers register plans with both the DMHC (all HMOs and some PPOs) and the DOI (PPOs only), they must offer a total of 4 plans for HIPAA, two from each registration.

3. HIPAA rates are regulated by state formula and cannot exceed 170% of the standard premium for the same plan via underwriting.

4. Retired HIPAA plans are not eliminated, since those HIPAA enrollees must remain on that plan as long as they are eligible to be enrolled (blocking), just closed to new enrollments.

So, up to 12/31/09, Anthem's highest premium earners for DHMC were 1500/2500 and DOI 5000/Basic 1000. Shield's were dual registered PPOs 1500/2000 so they offered the same plan twice, once for each registration.

Carriers can either replace the plans with new plans that are higher premium earners (this takes a long time) or retire the active underwritten versions and thus, eliminate them from the HIPAA offering. Both of the carriers exercised the second option.
 
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It's their own fault to a degree. Especially Shield and it's lousy underwriting (Health Net and Kaiser aren't any better).

When you decline applicants at the rate we have in CA (no riders, waivers or exclusions allowed), you are gonna naturally bulk up the risk pools.

Then to complain about loss ratios on the risk pools all the while declining people for sore throats and flu, well, that is just so much bs.

If you look on the MRMIP site, there is a chart showing enrollment in the risk pool by percentage. 78% Anthem, 22% spread amongst 3 other carriers. Pretty lop-sided. HIPAA pool was about the same.

Anthem gets it in CA. They have loosened up the standards to be as flexible as possible within reality for CA. I have a lot of Blue Shield declines issued level one with Anthem.

Anthem also gets that no matter how loose they get, they are still going to get the lion's share of risk pool business. Can't blame them for trying to even the spread.

BTW, I find it interesting that:

Blue Shield was kicked out of MRMIP in October 2009 for charging excessive premiums

Blue Shield just got the boot from the state's only pooled group program, CalChoice. They are being replaced by Anthem on June 1.
 
Spectrum 2000 was one of our top sellers .....

What ???
Since the new HSA's appeared on the market last year, I haven't sold a single Spectrum PPO 2000 plan.
Example, male age 40, region 6,
Spectrum PPO $2000, $330/mo.
Shield Savings $1800 HSA, $168/mo.
Spectrum PPO $2000 has maternity, ov copays of $45, seperate $500 deduct for brand rx and a max out of pocket of $7000.
Shield Savings $1800, no Mat, no ov copay, no rx copay and max out of pocket of $5800.
The difference in premium is $1944/yr.
No brainer.
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Anthem gets it in CA. They have loosened up the standards to be as flexible as possible within reality for CA. I have a lot of Blue Shield declines issued level one with Anthem.

X2

For several years now, I have seen the same. Declined by Blue Shield of Ca, approved By Anthem level 1, level 1 +25, or, level 1 +50.
I have NEVER once had a decline by Anthem get approved by Blue Shield of California.
Not only does Blue Shield decline at a high rate, it takes 4 to 6 weeks to get the decline letter.
It seems Anthem gets it. Address the uninsured, or, the state or feds will mandate GI.
 
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Up here in Washington State Premera Blue Cross has gotten rid of all but 3 plans for small groups 2-50. All are high deductible. No HSA plans left.
 
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