A recent Covered California data release suggests that there is a significant imbalance of customers among insurers participating in the exchange, with four health plans taking much of the region’s market share.
The report detailed that for the month of October 2015, 28% of customers picked Anthem plans, 26% chose Kaiser Permanente plans, 26% selected Blue Shield of California, and 16% opted for Health Net plans.
The remaining 4% of customers chose the other seven plans available on the exchange.
Although the insurance exchanges were supposed to introduce more insurance options for customers to choose from while encouraging healthier competition among insurers, the data suggests otherwise.
Understandably, the four most prominent insurers offered their plans across the state, which could explain the numbers. However, it does not fully explain why customers gravitate to the “big four,” especially when similar proportions have also been observed in other states.
An article on the
California Healthline website suggested three possible reasons why customers mostly chose the big four:
- The big four had the power of brand recognition
- A good number of enrollees were former customers of the big four
- Difficulties with navigating the health exchange website prompted many to go with plans that they are already familiar with, i.e. the big four
For now, health plan prices do not appear to play a major role in determining customers’ choices in California. It has been observed in other regions that there was no correlation between plan prices and signups—with the exception Massachusetts, so far.
“[It’s] way too early to read too much into the early enrollment numbers,” said Bay Area Council member Micah Weinberg. Weinberg pointed out that the numbers for October did not represent Covered California’s expected and/or eventual pool of customers.
