(From the most recent issue of Health Plan Market Trends):
The California Public Employees’ Retirement System has received bids from seven HMOs as it looks to expand the number of choices available to members, stress integrated care management, and migrate away from fully funded health plans toward self-insured coverage.
The result of the bid has important implications for the two incumbent HMOs: Kaiser, with 529,000 Calpers HMO members; and Blue Shield of California, with 400,000. However, it could be a big blow to Blue Shield.
That’s because Kaiser wasn’t asked to rebid for the business—having already met Calpers requirements around price and integrated care management. Kaiser will simply continue to be offered as one of the HMO options. Blue Shield, however, was thrown into the bidding mix with other competing plans and could conceivable lose the entire contract.
Plans bidding on the five-year contract, with coverage effective Jan. 1, 2014, are Aetna, WellPoint/Anthem, Blue Shield-CA, GemCare, Health Net, Sharp and UnitedHealth. Cigna initially expressed interest, but subsequently dropped out of the bidding.
Update, 4-18-13: Calpers awarded contracts to award HMO contracts to WellPoint/Anthem Blue Cross, Blue Shield of California, Health Net, Sharp and UnitedHealth.
Calpers officials want members have a choice of at least four HMOs, including one serving 33 of the state’s 58 counties, at least one other serving northern California and at least two others serving southern California. Several of the bids include both fully funded and self-insurance plans—in keeping with Kaiser’s stated goal of migrating toward self-insured coverage, a spokesman says. Other goals are to mitigate rate increases and to emphasize plans that stress integrated care management.
Among the plans bidding to provide fully funded and self-insured options in northern and southern California included WellPoint/Anthem in 34 counties, Blue Shield-CA in 42 counties and UnitedHealth in 21 counties. Health Net bid to provide fully funded and self-insured plans in six southern California counties, including Kern, San Bernardino, Los Angeles, Orange, Riverside and San Diego.
Plans bidding for a smaller number of counties included Aetna, which bid to provide fully funded plans in Riverside and San Bernardino counties. GemCare bid to provide global capitation plans in Kern, San Luis Obispo and Santa Barbara counties. Finally, Sharp bid to provide a global capitation plan in San Diego.
According to a Calpers spokesman, the most likely winners will be the plans with the broadest reach in terms of counties covered as well as those that proposed different funding options. In scoring the bids, Calpers rated Aetna as “inferior” and GemCare as “average.” Both proposed fully funded plans in a limited number of counties. All the other bids were scored above average.