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Obamacare data suggest Blues’ low-price strategy is working

Chicago Health Care Daily reports:

“The parent company of Blue Cross & Blue Shield of Illinois appears to be reaping the benefits of setting the premiums for its plans lower than other carriers on the federal health insurance exchange.

Across the 36 states on the federal marketplace, just 17 percent of 1.2 million individuals who have picked a plan have selected bronze, the bare-bones, lowest-cost option among the so-called metal plans, according to new enrollment data published yesterday by the U.S. Department of Health and Human Services for the first three months of enrollment.

But in the five markets in which Health Care Service sells Blues plans — Illinois, Texas, Oklahoma, New Mexico and Montana — 23 percent of enrollees signed up for bronze coverage, the figures show.

The HHS data further show that across all states — including those running their own exchanges — 20 percent of enrollees chose bronze, but Health Care Service’s bronze enrollments were well above that threshold. Illinois was at 24 percent; Montana, 26 percent; Texas, 23 percent; New Mexico, 22 percent; and Oklahoma, 22 percent.

Meanwhile, about 60 percent of individuals across state and federal exchanges selected silver plans. Thirteen percent selected gold plans.

To be sure, whether consumers actually are flocking to the company’s bronze plans isn’t publicly known. The federal figures aren’t broken down by carrier.

Still, the company is the dominant carrier in each of its markets and has taken on a low-price strategy relative to other insurers in each state, making it likely it is collecting the bulk of those consumers buying bronze plans.

Seen as key to the roll-out of President Barack Obama’s health reform law, the exchanges are online sites on which consumers can compare and buy insurance. The federally run site, HealthCare.gov, was plagued with technical problems from the start, though enrollment appears to have accelerated as those issues have been resolved.

Health Care Service will wait until after the enrollment period closes March 31 to release its own figures, spokesman Greg Thompson said.

In general, he said, the company tailored the design and pricing of its plans to make coverage affordable to the most consumers. Part of the strategy involved working with doctors and hospitals to include relatively broad provider networks for some of its lower-cost plans.

Combined with its experience selling plans in the individual market, the company could “price things in a way that is attractive to people,” the spokesman said.

According to HHS, about 2.2 million people signed up for insurance via state and federal exchanges between Oct. 1 and Dec. 28, a roughly 500 percent increase in December alone over the previous two months. In Illinois, about 61,000 people enrolled.

The figures marked the first time the federal government has released enrollment broken down by age groups and metal levels. A third of those who picked plans fell in the 55-to-64 age range, while about 24 percent were between 18 and 34, the coveted “young invincibles.””

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