Baumgarten's analysis excludes data from the major national insurers. That's in large part because those insurers don't break down their enrollment data in the NAIC reports by individual state. The share of pre-exchange enrollment captured by national firms ranged from 30.5% in Arizona to 5.6% in Minnesota.
There were some notable exceptions to the overall rule of thumb that new competitors struggled: Common Ground Healthcare Cooperative in Wisconsin picked up more than 27,000 customers, or 12.3% of all enrollees in state plans.
Baumgarten said pricing was the most important factor in determining how insurers fared in the fledgling marketplaces and that many new entrants weren't competitive pricewise. “I think they were dipping their toes in the water very, very conservatively,” Baumgarten said. “That conservatism in the end sort of weighed against them.”
Baumgarten also argues that new entrants were disproportionately hurt by the technical problems that plagued HealthCare.gov and many of the state-based exchanges, including Minnesota's MNsure marketplace. “They did not have the benefit of close ties to agents and brokers who would also be a sales channel for them and maybe they didn't have their in-house sales force really up to speed,” he said.
In Arizona, which relied on HealthCare.gov for enrollments, seven companies offered individual products through the exchange. Prior to the establishment of the exchange, Arizona's individual market was dominated by Blue Cross Blue Shield, which had 99% of market share among state plans. The Arizona Blue remained the largest player in 2014, capturing nearly 70% of individuals signing up for coverage. But another carrier, HealthNet of Arizona, made significant inroads, gaining more than 60,000 customers and increasing its market share from 0.5% to 30.8%.
However, two new competitors in the Arizona market – Health Choice Arizona and University of Arizona health – were effectively nonfactors in the market. Combined they signed up less than 1,000 individuals for coverage, according to Baumgarten's analysis. Another new entrant, co-op plan Meritus, had slightly more success, signing up roughly 3,500 customers, or 1.7% of the market. (The full enrollment for Meritus is reflected in two different NAIC filings. The original version of this story only included data from only one of those reports.)
In Michigan, which had a federal-state partnership marketplace, 13 health plans offered products through the exchange, although some of those plans were owned by the same insurer. There are expected to be five more plans competing for customers during the 2015 open enrollment. But Blue Cross Blue Shield proved dominant, attracting just over 70% of individual customers, down just slightly from its pre-exchange market share.
Some new entrants fared particularly poorly in Michigan. Meridian Health Plan, which offered a product that was co-branded with the Bronson health system in the southwestern part of the state, gained just 14 customers. Similarly, the state's co-op insurer, Consumer Mutual Insurance of Michigan, picked up just 189 customers.
Minnesota saw a significant shift in the composition of the individual market in 2014. That's because PreferredOne, which is affiliated with Fairview Health Services and North Memorial Health Care, captured more than a quarter of the market, up from just 6.3% at the close of 2013, according to Baumgarten's analysis. More than half of PreferredOne's enrollees came through non-exchange channels. The three other major players in the market—Blue Cross and Blue Shield, Medica and HealthPartners—all saw their share of the market decrease. A new entrant to the individual market, UCare, which previously only provided coverage to Medicaid beneficiaries, attracted only 422 customers through June.
In Wisconsin, which relied on HealthCare.gov for enrollment, 11 health plans competed for customers. No insurer secured more than 20% of the market. Five plans took at least 10% of the market, including Common Ground.
Baumgarten expects co-op insurers and other new entrants that didn't fare so well in year one to reduce their premiums to more effectively compete for customers in 2015. Otherwise the co-op insurers, which were established with federal loans under the ACA, could run into financial trouble. “I suspect that some of them won't be around in two years,” Baumgarten said.
Follow Paul Demko on Twitter: @MHpdemko