Integration vs. Choice: The Blues and Kaiser Permanente Fight for Market Share

by John Hansen

So, what do you think of Kaiser Permanente? The answer to that question will often determine whether you want to choose an HMO or a PPO. For many, once that choice has been made, they know what carrier they’re going with.

HMO vs. PPO

If your response is, “I’d rather die than sign up with Kaiser,” then likely you’ll want to go with one of the Blues. There are HMO people and there are PPO people. In California, Kaiser Permanente dominates the HMO market, and Blue Shield of California and Anthem Blue Cross dominate the PPO market.

Together, Kaiser Permanente, Blue Shield of California and Anthem Blue Cross took 78% of market share during the 2016 Open Enrollment. So, there are some other options*, but the majority of California went with one of these three.

Some remember all the horror stories of the early days of Kaiser Permanente and the HMO’s. 20-25 years ago some Californians made a decision that they hated HMO’s, and they decided that they would never go back to the “cattle call”. Kaiser Permanente claims that the days of long lines and no choice in doctors is over, but still some people have a bad feeling about HMO’s that they just can’t shake.

So for these consumers, PPO is the only way to go. I want to choose my doctor. I want to see a specialist when I want, and I don’t want to have to get permission from my primary care physician.

If that’s you, then the next question for you is: Do I go with Blue Shield or Blue Cross?

I’m a PPO Guy, so will it be Anthem or Shield?

The easiest metric to look at is price. Which one is cheaper in your area? But for many, the big question is: Is my doctor in the network? If you don’t have to, you don’t want to pay out-of-network prices. Or, it might matter to you how big the network is in your area, how many doctors, specialists, etc.

In general, Anthem Blue Cross tends to win when it comes to price. Blue Shield of California tends to win when it comes to network.

* Note: Health Net took 13% of the California Exchange Market during Open Enrollment 2016, so Health Net might be an option for you as well. And, of course, there are others smaller players who took 9% of the market to consider.