Blues plans dominating ACA exchanges—for now: report

The Blue Cross Blue Shield Association headquarters building
Blue Cross Blue Shield plans make up the majority of plans on the ACA's exchanges, but could face competition from national and regional payers.(Jonathan Weiss/Shutterstock)

Blue Cross Blue Shield makes up nearly half of the plans on the Affordable Care Act’s insurance exchanges, but that could change as larger entrants such as UnitedHealthcare give the market another look.

The analysis from the think tank Urban Institute conducted on behalf of the Robert Wood Johnson Foundation released Monday showed that Blue Cross plans are the entirety of the market or close to it in 11 states. But more competition is coming as wide-scale unemployment due to COVID-19 could create more enrollment in the exchanges.

Another source of competition could come from Medicaid insurers, which are already offering cheaper plans on the exchanges.


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The analysis, which looked at plan data from the Centers for Medicare & Medicaid Services from 2016 to 2018, found that 47% of all plans sold on the exchanges were from Blue Cross Blue Shield.

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Another 27% of plans were from Medicaid insurers and 14% were linked to a national/regional plan.

Provider-based plans made up 11% and co-ops only 2%, the analysis found.

Blues plans also typically dominate the competition in certain states. For example, Highmark Blue Cross Blue Shield in Delaware has 100% of the market as of 2018. The only competitor Aetna pulled out of the state that year.

Blue Cross and Blue Shield of North Carolina had 96% of the market in 2018 after UnitedHealthcare and Aetna left in 2016.

But the Blues’ dominance of the exchanges could be short-lived.

Major insurers such as Aetna, Cigna and UnitedHealthcare dramatically scaled back their participation in the exchanges due to mounting financial losses in the first couple of years of the exchanges after enrollment lagged. Aetna decided to get out of the markets altogether.

The COVID-19 pandemic could change that calculus though.

UnitedHealthcare, for instance, sought to enter Maryland’s ACA exchange last month. The plan will compete with Kaiser Permanente and CareFirst Blue Cross Blue Shield.

But Blues plans don’t just have to worry about greater competition from national plans. Medicaid insurers have increasingly offered cheap plans.

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This year, Medicaid plans offered the lowest silver tier plan premium in 59% of regions in which they participated, according to the analysis.

“These insurers tend to have more limited provider networks, reflecting lower than average provider payment rates, so a growing dominance of these insurers could have implications for provider revenues and consumer choice,” the analysis added.

Medicaid insurer plans comprise a majority of the market in eight states, but face competition from blues and some national/regional plans.

Urban noted that there has been an increase of insurers in 2019 and 2020 coverage years. It also remains unclear whether more national insurers will follow UnitedHealthcare’s lead and re-enter some markets.

“Whether these insurers will regain previous levels of enrollment, e.g. 2016, will be interesting to observe,” the analysis said.

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