More provider-sponsored plans are "retooling" their insurance offerings to more effectively compete during the 2014-2015 open enrollment period, which begins Nov. 15, Paul Demko writes for Modern Healthcare.
More insurers will join the exchanges next year
Why provider-sponsored plans didn't fare so well in 2013-2014
According to Demko, hospital and health systems are beginning to introduce their own insurance plans as a way to better coordinate care and rein in costs. The launch of the state and federal health insurance exchanges last year opened the door for such plans to compete with insurance companies that have long-dominated the individual and small-group markets.
However, the 72 provider-sponsored plans—which represented about 25% of all insurers selling plans in the exchanges—did not fare well during the 2014 open enrollment period, according to the Navigant Center for Healthcare Research and Policy Analysis. Paul Keckley, head of Navigant Healthcare, says technical difficulties during the first open enrollment period affected provider-sponsored plans, which did not have the funds to take advantage of the late enrollment surge.
As a result, providers have been forced to overhaul such plans to compete more directly with their counterparts.
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Provider plans set to decrease premiums this year, experts say
According to Modern Healthcare, it is likely that the number of available provider-sponsored plans in the health insurance exchanges will increase as more providers implement alternative payment models and population health initiatives.
Demko says it is likely that plans sponsored by hospitals and health systems could "fare better" in the market this year than other types of insurance plans—even if they do tend to offer more narrow networks. This is because there are more physicians employed by health care systems, giving systems more direct management of providers' quality and cost, he writes.
Moreover, it is probable that hospital-led health plans will decrease their premiums in the coming year. Alan Murray, president of CareConnect, says, "You can't have an ultra-narrow network and be priced too much higher than your competition, otherwise, people will start questioning the value." CareConnect plans to decrease its premiums by an average of 6% in the individual market and 20% in the small group exchange.
Meanwhile, Western Health Advantage—a California-based insurer started by three health systems that received just 4.9% of the exchange's market share during the first open enrollment period—says it will change premiums in the North Bay area, with the changes ranging from a 3% reduction to a 4% increase. In Sacramento, the average premium will decrease by 1.8%, and its silver-level plan will be the cheapest available in the market. Garry Maisel, the system's CEO, says, "We got much more aggressive" for the coming open enrollment period.
Similarly, Providence Health Plan in Portland, Oregon, says it will drop its individual exchange premiums by about 14% and its small-group premiums by 10%. The health plan failed to attract more than 5% of the Cover Oregon market during 2013-2014 open enrollment period (Demko, Modern Healthcare, 8/23 [subscription required]).
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