Looking to capitalize on the “neighborly” aura of State Farm Insurance, more Blue Cross and Blue Shield affiliates will work with State Farm agents to sell health plans during the Affordable Care Act's upcoming open enrollment.
The move signals a clear desire for Blues plans, already a leader in the individual market, to capture the remaining uninsured, who are likely to be healthier and more profitable than the first wave of ACA enrollees. More than 10 million people selected and paid for health coverage through an exchange for this year, according to June figures from the CMS.
Indianapolis-based Anthem, which is acquiring Cigna Corp. for more than $54 billion, is one of the new Blue Cross companies that will be working with State Farm. The Blue Cross plans in Michigan, South Carolina and Western New York will also team up with State Farm agents during the next open-enrollment period, which begins Nov. 1. In total, Blue Cross and State Farm will be working together in 19 states.
Health Care Service Corp., the Blue Cross insurer for five states, launched the partnership last year. Local State Farm agents are paid a commission for each member who buys a Blue Cross plan. The Blue Cross and Blue Shield Association, the parent group of the state plans, would not disclose the amount of the commissions.
The results from last year surpassed HCSC's expectations. The company enrolled three times more members through State Farm brokers than originally expected, although exact figures were not released.
State Farm is known more for its car and home insurance policies. But the Blues plans see the company as an important conduit to reaching people in retail settings close to their homes. “It allows our consumers to purchase coverage where it's most convenient for them,” said Jody Voss, a vice president at the Blue Cross and Blue Shield Association.
The individual market is still ripe for health insurers even though 10 million people have already received exchange coverage. The Congressional Budget Office estimates 22 million people will buy health plans through the ACA's exchanges by 2025, meaning insurers have penetrated less than half of the exchange market. Millions more have bought health plans off the exchanges and directly from insurers, which people can do with State Farm and Blues plans as well.
The first people to buy insurance through the exchanges were those who were sicker and would benefit most from subsidized health coverage, experts agree. Most enrollees were also poor or had modest incomes. The average premium subsidy for people who bought health plans through the exchanges was $272 a month.
