Blues Plans Report Stable Performance in Small-Group Segments

From Health Plan Weekly

The small-group market, which has been largely stable with single-digit rate increases for Blue Cross and Blue Shield plans despite upheaval in the individual market, could face headwinds driven by two forces: the Trump administration's moves to allow association health plans and short-term plans, and an increase in the number of small groups moving to administrative services only contracts.

"Our overarching concern — and the concern of most of the insurance industry, consumer advocates and state regulators — has been the creation of separate risk pools within a market that has just started to stabilize," says Brett Mayfield, vice president, sales, for Independence Blue Cross.

Still, Blues plans report consistent performance in their small-group segments. According to Michael Considine at Horizon Blue Cross Blue Shield of New Jersey, the insurer dominates the small-group market in its region, with a 62.5% market share, even as the market itself is shrinking.

In Highmark Health's plans, small group represents about 4% of total health plan membership, says a spokesperson. He adds that on average, Highmark's small-group rate increases over the last couple of years have been in the single digits.

It's not clear how association health plans will impact the small-group market going forward, the Highmark spokesperson says.

States vary widely in their small-group market conditions, Mayfield says, and that's why rate requests across the country also vary. Overall, Independence has seen single-digit increases on average since the advent of the Affordable Care Act, he says, similar to Highmark's Blues plans. Horizon also has limited premium increases to single digits in each of the past few years, Considine says, and expects rates to increase an average of 4.2% for 2019.

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