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Blue Shield Acquires “Care First” to Deal with Covered CA Toggle Market

by John Hansen

Care First Will Aid Blue Shield with Consumers Who Toggle Between Covered CA and Medi-Cal

In 2015, Blue Shield, California’s largest non-profit health plan, acquired “Care First”. Currently, the medical insurance carrier is working to integrate Care First into the company.

Crossing the FPL Line and Toggling Between Covered CA and Medi-Cal

For adults that line is at 138% of the Federal Poverty Level (FPL). When the household income goes above 138%, the adult consumer qualifies for a Covered California plan with a subsidy. When the income goes below 138% of FPL, the consumer qualifies for free or cheap health insurance coverage through Medi-Cal.

For children the FPL line is at 250% of FPL, and for pregnant women who get AIM (Access for Infants and Mothers) the line is at 300% of FPL. For a family of three with a pregnant mother, all three Federal Poverty Lines may apply. And, when income fluctuates, you can see how it becomes an absolute nightmare to keep track of which family members qualify for Medi-Cal and which ones qualify for Covered CA at any given time.

What is Care First?

Care First was designed to manage the “Toggle Market,” which refers to individuals and families that are constantly in and out of Medi-Cal. Many of these consumers have incomes around the line between Medi-Cal and Covered CA, so they are constantly going back and forth.

Clients who are repetitively in and out of coverage can be a nightmare for carriers to deal with. One month, they are on a Covered California Blue Shield plan and two months later they have been switched over to Medi-Cal due to a drop in income. For some families this changing back and forth between Covered CA coverage and Medi-Cal can happen two to three times a year.

This presents many complications when consumer information is being processed by various systems. The consumer’s information is found in Covered CA records, Blue Shield systems and the Statewide Automated Welfare System (SAWS).

Why would Blue Shield seek to acquire this business?

The Covered CA/Medi-Cal Toggle Market is actually a big market, which includes hundreds of thousands of California individuals and families. Care First will help Blue Shield of California service this population better, which ultimately should give them a market advantage for expanding their membership.

This market is difficult to deal with. There is additional paperwork as clients toggle between Medi-Cal and Covered CA. Systems like SAWS do automated updates, which can intentionally or inadvertently cancel a consumer’s health plan coverage.

So many things can go wrong and information can get messed up when various users are accessing various systems housing customer information. Consumer information can be modified by the consumer, by the health insurance agent, by Covered CA, by Blue Shield or by SAWS. Keeping all parties on the same page can be difficult. This is what Care First does well, so the acquiring of this company will be a big help to Blue Shield of California.