Newly enabled competition between Blue Cross Blue Shield plans is continuing to contribute to Elevance Health’s commercial insurance business, leadership said on the company’s quarterly earnings call Oct. 21.
Dubbed the “second blue bid,” the provision stems from a $2.67 billion settlement that resolved class action allegations dating back to 2012 that BCBS plans conspired to divide up markets to avoid competing with one another. The settlement eliminated a rule that required large employers to work with the BCBS plan covering their headquarters’ geography, thereby allowing certain national accounts to solicit bids from a competing Blues plan.
Elevance, which owns 14 BCBS companies, said in January that it won nine of 11 second blue bid accounts in its first year competing under the provision. Morgan Kendrick, the company’s president of commercial and specialty health benefits, said on the third quarter earnings call that second blue bid opportunities have also been a component of its 1.7 million-member national accounts pipeline for 2027.
“We have done quite well there,” he said. “We are not winning every one of them, but the market is reaping the benefits of the settlement with the Blues and having different solutions available for them.”
Mr. Kendrick noted that “several large jumbo employers have moved back to Anthem after moving away for 12 months,” citing the company’s integrated medical and pharmacy offerings and its Carelon health services capabilities as drivers of the returning business.
The broader BCBS system continues to face antitrust scrutiny, with Michigan Attorney General Dana Nessel accusing BCBS Michigan of conspiring with other Blues plans to block competition and using its market dominance to overcharge the state and underpay hospitals. In its response to the state’s lawsuit filed earlier this month, BCBSM said it “fundamentally disagrees” with the characterization and noted that local and national insurers compete in the state daily.
Elevance reported third-quarter operating revenue of $50.4 billion, up 0.7% year over year, and raised its full-year 2026 adjusted diluted EPS guidance to at least $29. The company’s commercial fee-based membership, which includes national accounts, grew 2.2% year over year to 27.6 million members.
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