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Welborn Health Plans announced that they are exiting the health insurance market in Indiana. They had more than 30,000 members. It comes to no surprise why small health insurance providers pull of Indianapolis. Most of these small companies rent PPO networks. This means they have additional cost in the form of access fees. The rented network also can not deliver as deep of discount vs. a national network.
The last few years we have seen carriers like UnitedHealthcare and Anthem really control the Indianapolis market. In the Southern part of the state Humana is very competitive. One of the reason these companies have a huge advantage here is they own their own network. This gives them the ability to get the deepest network discount when it comes to claims.
Small companies like Welborn are going to have a difficult time competing now and in the future. One could go as far to say they cannot compete against national companies.
The problem with the small health carrier leaving the area is that it reduces the competition. A lack of competition can only lead to higher pricing.
