HCSC doubles down on Medicare Benefit as market share declines

Well being Care Service Corp. plans to broaden its Medicare Benefit enterprise into one other 150 counties subsequent yr because the insurer seeks to achieve a foothold in an more and more aggressive marketplace for non-public Medicare plans. 

The enlargement represents the biggest within the historical past of the not-for-profit firm, which sells Blues Cross and Blue Protect plans in Illinois, Montana, New Mexico, Oklahoma and Texas. The insurer should receive clearance from the Facilities for Medicare and Medicaid Companies to supply Medicare Benefit insurance policies in these new counties.

“There could be no extra aggressive house in all of medical insurance than Medicare Benefit,” mentioned Nathan Linsley, the corporate’s senior vice chairman of presidency and particular person markets. “We see vital competitors each from nationwide carriers and we have additionally seen a number of competitors from newer entrants.”

HCSC additionally broadened the geographic attain of its Medicare Benefit operations final yr when it ventured into 90 new counties. That helped the corporate improve Medicare Benefit membership by 10,000 to 120,000 as of Jan. 1, in response to Chartis Group knowledge.

Regardless of that progress, HCSC’s Medicare Benefit market share fell to three.4% firstly of the yr, down from 4.4% in 2019, in response to the Chartis Group. The insurer counts almost 7.5 million members throughout its enterprise strains. 

“Their presence is generally within the business house and, like so most of the Blues, they’ve probably not seen measurable enrollment in Medicare merchandise,” mentioned Nick Herro, a principal on the Chartis Group. 

Blue Cross and Blue Protect plans’ Medicare Benefit market share shrank from 15.4% in 2019 to 13.9% this yr, Chartis Group knowledge present. Nationwide carriers equivalent to UnitedHealth Group’s UnitedHealthcare, Centene and CVS Well being’s Aetna captured the purchasers Blues plans misplaced, the consulting firm discovered.

Blues plans face a drawback in contrast with nationwide firms as a result of, in lots of circumstances, the Blue Cross and Blue Protect Affiliation limits member plans’ geographic attain, Herro mentioned. Increasing to new areas has been key to the expansion methods for-profit Medicare Benefit insurers have executed, he mentioned. 

“There’s alternative ways to develop outdoors of these constraints, however their choices are lower than a for-profit plan or a nationwide plan,” Herro mentioned.

Within the 5 states the place it operates, HCSC seeks to distinguish itself by providing plans that require no out-of-pocket prices, Linsley mentioned. HCSC additionally goals to say house within the crowded market by specializing in rural and underserved counties, he mentioned. The corporate expects double-digit proportion progress in Medicare Benefit enrollment subsequent yr.

Medicare Benefit plans have attracted a smaller share of Medicare beneficiaries in rural areas than in metropolitan areas, partly due to affected person issues about slim networks, mentioned Ari Gottlieb, a principal at A2 Technique Group. Some insurers likewise have been reluctant to enter rural Medicare Benefit markets as a result of there are so few suppliers, he mentioned.

“In the event you’re the one hospital on the town, [you] begin from a stronger negotiating place than [in] aggressive city markets, and that is going to affect product design and profit choices,” Gottlieb mentioned.

Much less competitors in rural areas has translated to much less beneficiant Medicare Benefit advantages, which additionally makes the privatized type of Medicare much less engaging, Gottlieb mentioned. However that could be altering.

Because the Medicare Benefit market will get more and more aggressive, newer entrants are rural markets as a strategy to compete with nationwide rivals, Gottlieb mentioned. Insurtechs Clover Well being and Alignment Healthcare, each of which not too long ago introduced enlargement plans centered totally on rural communities, are examples, he mentioned.

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