Top District officials, including its insurance commissioner, have sharply criticized the region’s largest health insurer in recent days, accusing it of “gaming the system” and undermining the city’s closely watched efforts to establish a health insurance exchange.
But CareFirst BlueCross BlueShield said in a statement Monday that it remains committed to the exchange and said the officials’ accusation is “neither correct nor reflects CareFirst’s intent.”
The dispute centers on the number of small-business health insurance plans the company will offer for sale on the exchange, a federally mandated marketplace that is a cornerstone of the federal health-care overhaul. The city accused CareFirst of drastically cutting the number of small-business plans; the insurer denied that, saying it still would offer plenty of coverage.
CareFirst is the city’s dominant private health insurer — particularly in the individual and small-business sectors, where it holds 67 percent and 75 percent market shares, respectively — and officials believe its participation is crucial to the success of the exchange.
Without the Owings Mills, Md.-based company’s robust participation, the officials fear, many small employers will purchase their policies outside the exchange, leaving employers ineligible for federal tax credits and leaving the exchange with insufficient customer volume to achieve the exchange’s cost-lowering potential.
In a May filing, CareFirst indicated to the D.C. Department of Insurance, Securities and Banking that it would offer 62 small-business policies — those for groups of 50 employees or fewer — for sale on the city’s exchange. Officials were pleased by that level of variety, added to the nearly 200 small-group plans proposed to be offered by other exchange participants Aetna, Kaiser Permanente and United HealthCare.
But CareFirst submitted a new round of filings Friday, which indicated it would offer a much smaller portfolio of health plans on the exchange. One CareFirst subsidiary would offer four plans on the exchange, while offering 31 additional options only available off the exchange; another subsidiary would also offer four plans on the exchange, with 15 other plans off the exchange.
That led William P. White, the District insurance commissioner, and Mila Kofman, the exchange’s executive director, to issue a joint statement Sunday that was unusual in its weekend timing and aggressive tone.
Both said they were surprised by CareFirst’s apparent decision to scale back its exchange presence, considering its active role in helping to develop the exchange.
“At this point, they are gaming the system and it looks like a case of bait and switch,” White said, criticizing the firm’s “drastically limited options.”
“For many years, CareFirst has benefited from its position as a market leader in the District,” he continued. “As such, it should show greater concern for the interests of the overall marketplace. CareFirst has a decision to make. Do they stand with the workers and business owners of the District of Columbia, or will they continue to put profits over principle?”
Mohammad N. Akter, the chairman of the exchange’s executive board and a former city health director, criticized CareFirst in similarly strong terms in an interview Monday morning, accusing the insurer of “arrogance” and “childlike behavior.”
Responding on Monday, a CareFirst spokesman said the city had misinterpreted the filings and said it will offer 54 small-
business plans on the exchange.
“Our intent has been to offer this array of products both on and off the Health Benefits Exchange,” said the spokesman, Scott Graham, “and it is unfortunate the information published does not correctly reflect our intent.”
After CareFirst issued its response, White said he stood by the Sunday statement, which was based on “clear and incontrovertible language” in the company’s filings. “I am, however, pleased that CareFirst tells me today they plan to participate fully in the health-care exchange so that more people may have health insurance,” he added.
The dispute occurs against the backdrop of a D.C. Council vote Tuesday on a bill setting key policies for the exchange — including requiring small businesses to purchase through the exchange starting in 2015.