Blues Plans Struggle in 2019 Large Group Sales Season

From Health Plan Weekly

While the Blue Cross and Blue Shield plans are relatively strong in their local markets, they're facing some struggles in competing for large-group customers against national insurers like UnitedHealth Group that have invested more in advanced data analytics.

"The Blues have been taking some big hits, more in [politically] blue states than in red states," says Randy Vogenberg, Ph.D., at Access Market Intelligence. The Blues haven't been performing in larger cities, secondary major city markets and other high-cost areas, and they "are not very flexible — it's a fundamental issue," according to Vogenberg.

In addition, as more employers demand tighter, high-performing networks, which some Blues don't have, they might lean toward UnitedHealth that has "some of the best performing products," says William DeMarco at Pendulum HealthCare Development Corp.

Changes to Affordable Care Act regulations under the Trump administration also intensify competition to Blues. "[It] allows employers to have more flexibility in what they're looking at. At the smaller end of the marketplace, where the Blues dominated, fully-funded employers are now choosing to go in a self-funded direction," Vogenberg says.

Ashraf Shehata, principal and health care leader at KPMG LLP, suggests that larger Blues' efforts to improve their administrative cost basis has started to pay off, making their products more attractive to employer groups. In addition, they have very good relationships with state governments.

Blues plans still insure a high percentage of the population in the southern part of the nation, though they fail to differentiate themselves. Blues need to address their "antiquated" information technology systems to compete more effectively with other insurers, Vogenberg says.

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