Local insurers explain participation in health exchanges
JANESVILLE--Local consumers soon will be able to buy individual insurance plans from MercyCare and Dean Health Plan through the federal health care reform's new exchange.
The state this week released a list of 13 insurance companies that will offer plans on the exchange, but no details about the plans or costs have been shared.
It's crunch time for insurers and the government to educate the public about the exchanges, which are scheduled to allow individuals and small businesses to begin buying plans on them Oct. 1. That's in preparation for next year's mandate that everyone have health insurance.
Despite many unknowns, administrators at MercyCare and Dean Health cited several reasons for entering the exchange, also known as the marketplace.
Both local providers will offer plans to individuals on the marketplace, and MercyCare also will sell plans on the exchange for small businesses—those with two to 50 employees.
MercyCare's plans on the individual exchange will mark the first time, outside of Medicare, that it is offering plans to individuals, said Joe Nemeth, vice president and chief operating officer of MercyCare Health Plans.
“We had been considering getting into the individual market for quite some time,” he said. “Our assessment of the situation was that this change … actually allowed a smaller insurer like MercyCare to enter the market because the big risks were shared in a different fashion.”
He said they also considered Gov. Scott Walker's plan to reject federal money to expand Medicaid, forcing a number of Medicaid enrollees to find new options.
Insurers anticipate receiving a list of Medicaid members being displaced from their plans in the coming weeks, which will give them a better projection of potential plan members.
Mercy always has offered plans to small businesses and will continue through the exchange.
“We choose to participate because we felt that this is where it's going, even though the current prediction is only 6 to 10 percent of small group employers will go through the exchanges next year,” he said.
That's likely because all the features of the exchanges haven't been set up yet, he said.
“But we wanted to make it as convenient as possible for any small group employer to find out what MercyCare rates are,” he said.
It was an easy decision for Dean Health to participate in the individual exchange, said Peter Thompson, spokesman for Dean Health Plan.
“We're so strong in the individual market already,” he said. “With the popularity of it in the Janesville/Madison markets, it kind of was a no-brainer.”
They chose, however, to not yet enter the small employer exchange, he said, mostly because it is structured only to allow the employers to make decisions. Originally, they thought the intent was to have employers offer employees multiple choices from the exchange, he said.
“Since the exchange doesn't offer that, we didn't see any real benefit in offering yet another option where an employer picks the plan,” he said.
He suspects Dean will offer small business plans as the exchange evolves to allow employees more choices.
Officials at both health plans declined to go into specifics about their plans and costs, citing competitive reasons and the fact that the state did not release the information.
The Affordable Care Act set guidelines for what needs to be included in each level of plans.
“We still want to offer a plan that is desirable to our customers,” Thompson said, and they made numerous decisions about how many plans to offer. “I think everybody will be satisfied with what we have.”
Setting prices came down to the type of plan and historical care patterns, Nemeth said.
“What you don't know is who is going to sign up for your product,” he said. “We have the benefits, we know what our rates are. Then you had to make decisions as to where did you think everybody else is going to be.
“At the end of the day, you have to cover your costs,” Nemeth said. “You set premiums based on what your costs are.”