The state’s largest health insurance company is adding the firepower of the nation’s largest home and auto insurer to sell health care policies this fall, both companies said Tuesday.
Health Care Service Corp., the parent company of Blue Cross and Blue Shield of Illinois and Blues plans in four other states, will bolster the number of insurance agents selling its products by about 20 percent with the pact, said Jeffrey Welch, the company’s divisional vice president of retail markets.
Bloomington, Ill.-based State Farm, whose agents have long sold health policies in addition to home and auto, will now exclusively sell Blue Cross and Blue Shield individual policies in Illinois, Montana, New Mexico, Oklahoma and Texas beginning Nov. 15, the start of open enrollment for coverage that begins in 2015.
State Farm won’t bear any underwriting risk; its agents will function much like independent health insurance brokers, earning commissions on selling individual and family Blue Cross products listed on and off the health care exchanges created under the federal Affordable Care Act.
The agreement does not include small group or Medicare plans. State Farm will stop selling individual plans from Milwaukee-based Assurant Health in the five Health Care Service Corp. states, Welch said.
The pact should allow Blue Cross, which signed up 1.2 million across five states in 2014, to beef up its enrollment figures as more Americans seek individual insurance policies under the health law.
The insurer sold about 200,000 policies on the Illinois health insurance exchange this year, good for about 92 percent of the market.
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“Any time you bring two of the most recognized brands together, it gives (customers) more opportunities to buy our products,” Welch said. “It’s an alliance with mutual benefits. Expectations are high.”
Health Care Service Corp. views the partnership as a way to penetrate harder-to-reach markets within its five states by leveraging State Farm’s retail storefronts. State Farm has more than 11,000 agents across 3,300 agencies in the five states, including 4,000 at 1,200 storefront agencies in Illinois.
Last year, agents and brokers sold about 65 percent of the policies Health Care Service Corp. sold outside the Obamacare marketplaces, but only 20 percent of those sold inside.
Initially, Blue Cross expects most of the policies sold by State Farm to be those listed outside the marketplaces.
“But as time goes on, I expect we’ll start seeing more and more on-exchange members who are subsidy-eligible coming through because of the storefront perspective,” Welch said.
Although some State Farm agents have sold health policies for years, Blue Cross will provide voluntary training on its portfolio of plans, the companies said.
State Farm will offer discounts for customers who buy multiple lines of coverage. But health plans purchased on the health insurance exchanges must be sold at list price, notwithstanding federal subsidies that will be available to some consumers based on income.
Twitter @peterfrost