- 3,384
It has to do with the HIPAA GI plans in California.
Anthem tried to bail last fall by cutting off commissions on new HIPAA sales in CA eff 11/1/09. They backed off of that within a week (and won't say why, even to the RSMs) at the same time they retired the PPO Share plans.
They likely got regulatory approval from DMHC to change the HIPAA offerings for 2010 (very late) and replaced the primary seller on HIPAA (PPO HIPAA 1500) with HMO coverage. They had to retire the 1500 PPO Share plan in order to eliminate it from the HIPAA portfolio since it still constituted one of the "most popularly marketed" plans making it a required HIPAA offering.
This action on Jan 8th (announced on the 11th through the back door) pushed a large chunk of the new HIPAA enrollments to Blue Shield's 1500 Spectrum PPO.
Blue Shield saw the shift (prior years Anthem claims they were getting almost 80% of the HIPAA enrollments in CA)and realized that if they did nothing they were going to be getting that 80% on the Spectrum plan.
In retaliation, Shield killed the porfolio of Spectrum PPO plans to escape the same rules that governed Anthem for HIPAA plans. Since Shield is no longer offering the 1500 or 2000 after 3/1 (and thus they cannot constitute "most poplularly marketed plans" rule), they were able to re-allocate the HIPAA portfolio with a full change-out of plans to either higher deductible, HMO and/or the HSA 4000.
To understand the situation, a quick refresher in CA HIPAA requirements:
1. Each carrier selling IFP in California MUST provide it's two most popularly marketed health plans to the HIPAA pool for each registration (this translates to the highest premium earning plans)
2. Since many carriers register plans with both the DMHC (all HMOs and some PPOs) and the DOI (PPOs only), they must offer a total of 4 plans for HIPAA, two from each registration.
3. HIPAA rates are regulated by state formula and cannot exceed 170% of the standard premium for the same plan via underwriting.
4. Retired HIPAA plans are not eliminated, since those HIPAA enrollees must remain on that plan as long as they are eligible to be enrolled (blocking), just closed to new enrollments.
So, up to 12/31/09, Anthem's highest premium earners for DHMC were 1500/2500 and DOI 5000/Basic 1000. Shield's were dual registered PPOs 1500/2000 so they offered the same plan twice, once for each registration.
Carriers can either replace the plans with new plans that are higher premium earners (this takes a long time) or retire the active underwritten versions and thus, eliminate them from the HIPAA offering. Both of the carriers exercised the second option.
Anthem tried to bail last fall by cutting off commissions on new HIPAA sales in CA eff 11/1/09. They backed off of that within a week (and won't say why, even to the RSMs) at the same time they retired the PPO Share plans.
They likely got regulatory approval from DMHC to change the HIPAA offerings for 2010 (very late) and replaced the primary seller on HIPAA (PPO HIPAA 1500) with HMO coverage. They had to retire the 1500 PPO Share plan in order to eliminate it from the HIPAA portfolio since it still constituted one of the "most popularly marketed" plans making it a required HIPAA offering.
This action on Jan 8th (announced on the 11th through the back door) pushed a large chunk of the new HIPAA enrollments to Blue Shield's 1500 Spectrum PPO.
Blue Shield saw the shift (prior years Anthem claims they were getting almost 80% of the HIPAA enrollments in CA)and realized that if they did nothing they were going to be getting that 80% on the Spectrum plan.
In retaliation, Shield killed the porfolio of Spectrum PPO plans to escape the same rules that governed Anthem for HIPAA plans. Since Shield is no longer offering the 1500 or 2000 after 3/1 (and thus they cannot constitute "most poplularly marketed plans" rule), they were able to re-allocate the HIPAA portfolio with a full change-out of plans to either higher deductible, HMO and/or the HSA 4000.
To understand the situation, a quick refresher in CA HIPAA requirements:
1. Each carrier selling IFP in California MUST provide it's two most popularly marketed health plans to the HIPAA pool for each registration (this translates to the highest premium earning plans)
2. Since many carriers register plans with both the DMHC (all HMOs and some PPOs) and the DOI (PPOs only), they must offer a total of 4 plans for HIPAA, two from each registration.
3. HIPAA rates are regulated by state formula and cannot exceed 170% of the standard premium for the same plan via underwriting.
4. Retired HIPAA plans are not eliminated, since those HIPAA enrollees must remain on that plan as long as they are eligible to be enrolled (blocking), just closed to new enrollments.
So, up to 12/31/09, Anthem's highest premium earners for DHMC were 1500/2500 and DOI 5000/Basic 1000. Shield's were dual registered PPOs 1500/2000 so they offered the same plan twice, once for each registration.
Carriers can either replace the plans with new plans that are higher premium earners (this takes a long time) or retire the active underwritten versions and thus, eliminate them from the HIPAA offering. Both of the carriers exercised the second option.
Last edited: