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The Rise and Fall of Health Net in the Covered California Marketplace

In the 2014 Open Enrollment for Covered California, Health Net was likely the most creative player in the game. They experimented with offering super affordable medical insurance with narrow networks. On price, they went for the bookends, often offering the cheapest health plans as well as the most expensive.

Narrow Networks: Less Options, Lower Prices

Early on when Health Care Reform enrollment began in California, Health Net played the game of offering low priced coverage in narrow networks. The first year this seemed to work for them as their numbers were up there closer to Kaiser Permanente and Blue Shield/Blue Cross.

The Big Four

California Agents referred to “The Big Four”:

  • Blue Shield of California
  • Anthem Blue Cross
  • Kaiser Permanente
  • Health Net

Health Net had made its place among the top carriers in the state of California. 

Health Net’s Creativity Seems to Have Backfired

However, in following years these creative strategies seem to have backfired on Health Net. In 2014, people had a hard time finding doctors on these cheap Health Net plans. Many of these consumers got a bad taste in their mouth for Health Net and have switched over to carriers like Blue Shield of California who offer larger networks.

Health Net took only 13% of market share in the 2016 Open Enrollment. Compared to the other eight carriers who totaled only 9% of the market, that’s not bad. However, this begs the question: Should California stop referring to the top four and start referring to the top three?

The Innovative Health Insurance Carrier May Rise Again

Some theorize that Health Net has been lying low, licking their wounds since the challenges of 2014. They have a reputation to salvage. They’ll have to come up with creative ways to be competitive against the PPO dynamos, Anthem Blue Cross and Blue Shield of California. And, they’ll have to find a way to challenge the rising tide of the HMO powerhouse, Kaiser Permanente.

In a world of rising health care costs and change, creativity in the California Health Insurance Marketplace needs to be encouraged, and Health Net seems to be the carrier that is willing to challenge the status quo and keep things interesting in the health care market. At some point, Health Net may rise to the occasion again in California when it comes to offering innovative solutions to the challenge of providing affordable health insurance coverage in the Golden State.