Let's assume the federal health marketplace website actually starts working efficiently, the state-run exchanges clean up their bugs, and every other star aligns for the successful launch of exchanges in 2014. Who will be the enrollment winners among health plans.
Most bets are on the Blue Cross Blue Shield plans that are playing in almost every state. They have fielded competitive rates and a combination of broad and narrow networks. And they have brand recognition, which is important to individuals making insurance choices perhaps for the first time.
I think the runner-up could be Humana, the carrier better known for Medicare Advantage and Part D plans rather than its commercial book of business. Unlike most of its national for-profit health plan peers (UnitedHealth, Aetna and Cigna), Humana appears to be embracing opportunities from the new marketplaces.
Humana is demonstrating its commitment in more ways than one:
- Scope : Humana is competing in parts of 14 states, from Alabama to Utah. Unlike BCBS plans, Humana is not covering the water, but is making strategic plays in areas where it has solid provider networks and can concentrate its impact. In Texas, it is competing in Austin, Corpus Christi, Houston, McAllen, San Antonio and Waco, leaving a lot of territory for others but still targeting enough space to make it worth a gamble. In Ohio, its focus is on its old stomping grounds in Cincinnati and Dayton.
- Public enthusiasm for the marketplaces : As technical problems have mounted about access to websites, criticism from Humana has been noticeable in its absence. Several other carriers have complained of messed-up files from the feds or bad communication in general, but Humana's response has been muted. That approach may make sense it has as much at stake in the success of the federally run marketplaces as anyone 11 of the 14 states that make up its exchange footprint are in the federal space. Humana has also partnered with CVS to promote the marketplaces in the retail chain's drug stores over the coming months and is doing other promotions. Finally, Humana stepped up to the plate in beleaguered Mississippi, where the BCBS plan refused to participate and the feds coaxed both Humana and Centene to participate.
- Pricing : CitiResearch recently published analysis around Humana's pricing strategy in one of its most-populous targets Harris County, home of Houston. There, Humana's Platinum product is cheaper than all but four of the Silver products offered. The conventional wisdom is that most carriers priced most aggressively for the Bronze, Silver and Gold plans as ways to avoid the sickest enrollees gravitating to the plans with the least out-of-pocket costs. But Humana is on to something entirely different. It may be ceding the lower-premium Bronze and Silver plans in the subsidized market to the Medicaid players like Centene and to CO-OPs looking to gain quick market shares, and opting instead for the slice of the market that will need more medical management but pay higher premiums into the system.
- Experience : Aside from UnitedHealth (which is focused mostly on a limited number of small-group exchanges in 2014) no large Medicare carrier has more experience in marketing to individuals than Humana does. It has been successfully building its brand since the launch of the Part D benefit in 2006. Humana has been savvy about co-marketing with retailers such as Walmart, understands how to price products for individuals, and has steadily improved its quality metrics through the Medicare Star program. The hundreds of lessons learned from Part D and Med Advantage should serve it well in the exchanges.
In his Oct. 21 address about the problems plaguing healthcare.gov, President Obama compared the website to a cash register, all set to ring up a good product, but so far, mostly unable to do so. For Humana, the repairs can't come soon enough.
Follow Jane DuBose on Twitter @JaneGDuBoseHLI