June 22, 2018
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Early figures suggest startup insurer outpacing Anthem on Obamacare enrollment

Kevin Lewis, CEO of Maine Community Health Options
By Jackie Farwell, BDN Staff

A local startup health insurer appears to be outpacing market leader Anthem in signing Mainers up for coverage under the Affordable Care Act.

Early numbers, still subject to change, indicate the nonprofit Maine Community Health Options, or MCHO, based in Lewiston, has captured nearly 73 percent of the Maine residents who have chosen a health plan through healthcare.gov, the federal government’s gateway for the marketplaces in Maine and 35 other states.

Last week, the U.S. Department of Health and Human Services released updated enrollment information showing that 1,747 Mainers chose a plan through the website from its launch on Oct. 1 through Nov 30. Kevin Lewis, CEO of MCHO, said 1,268 people enrolled in his nonprofit’s plans during those two months, based on data it has received from the federal government.

Anthem Blue Cross and Blue Shield in Maine, the only other insurer in the state selling plans through healthcare.gov, declined to release enrollment figures. In Maine, Anthem has been the largest player in the market healthcare.gov targets, people who buy their own insurance rather than get coverage through work or government programs such as Medicaid and Medicare.

With the balky healthcare.gov improving day by day, more Mainers are signing up for health insurance, Lewis said.

“We’re seeing vastly accelerated pace of enrollment now relative to the first couple of months,” he said. “It definitely seems to be working, we’ll see what the rest of December brings, but we’re well on our way to getting lots of people into coverage.”

Lewis expressed confidence in the enrollment figures, despite data errors that have plagued healthcare.gov behind the scenes, preventing the website from properly alerting insurers when a new member enrolls in their plans. The faulty transmissions have led to insurers receiving some flawed or duplicate enrollment records.

The errors in enrollment files MCHO has received actually suggest the nonprofit’s sign-ups might rise further for the October-November period, Lewis said.

But Emily Cooke, an attorney at Pierce Atwood in Portland with expertise in the Affordable Care Act, said it’s too soon to draw any conclusions. Along with the data errors, possible differences in data-collection methods and the small sample size make the figures unreliable at this early stage, she said.

Consumers also still have three more months, until March 31, to sign up for health insurance during healthcare.gov’s open enrollment period. Many are expected to wait until the last minute.

“We know it’s very likely that we’ll see enrollment creep up, so it certainly could shift that balance [between MCHO and Anthem],” she said.

Anthem said in a statement that enrollment has increased significantly since the end of November, as technical issues with healthcare.gov, both on the front and back ends, continue to be resolved.

“For the next few weeks we anticipate that this trend will continue as Mainers learn more and make decisions on the best health care option for them and their families,” the statement said.

MCHO entered the state’s health insurance scene in 2012, winning a $62 million loan from the federal government to become one of several “consumer operated and oriented plans” across the country. The “co-ops” were created through the Affordable Care Act to bolster competition in the marketplace, traditionally dominated by big insurers in Maine and many other states.

Governed by its policyholders, much like a mutual insurance company or credit union, MCHO must use any profits to help its members, such as by lowering premiums or improving benefits. Some co-ops, including MCHO, offer coverage both on and off the healthcare.gov marketplace.

Chief among the challenges for co-ops is attracting enough people to buy their policies, giving them sufficient clout to negotiate prices with providers and allowing them to survive financially without relying on federal money into the future.

Nationally, some of MCHO’s fellow health insurance co-ops have struggled. One in Vermont was forced to dissolve after the state denied it a license, projecting the co-op would lose millions of dollars, and federal funding was pulled.

Co-ops in Maryland, New York and New Jersey were forecasted to run into financial trouble in a review by the private firm Deloitte, and DHHS’ Office of Inspector General found in July that 11 co-ops’ projected startup expenses topped their available funding.

“We have every expectation that all of these co-ops are going to succeed because they have something really unique to offer,” said Jan VanRiper, executive director of the National Alliance of State Health Co-ops.

Many of the co-ops have adopted models that emphasize primary care and prevention, and a number are offering doctors and hospitals financial incentives to improve their policyholders’ health, she said.

While consumers in other states could be on the hook for medical bills if the co-ops become insolvent, in Maine insurers sign contracts with health providers that prevent the providers from billing patients if the insurer fails to pay, according to Maine Insurance Superintendent Eric Cioppa. Policyholders would still be responsible for co-pays or other costs outlined in their plan.

MCHO is also backed by $55 million in reserve loans awarded by the federal government. The nonprofit needs the state insurance bureau’s approval to repay those loans, Cioppa said, so if it runs into money trouble, the state could order it to withhold payment.

VanRiper said she found MCHO’s early results encouraging, noting that other co-ops hit harder by challenges out of the gate may fall short of that kind of performance.

“There’s more to the success of a co-op than early enrollment numbers,” she said.

For both co-ops and traditional insurers, the health reform law’s market overhauls also rely on young, healthy Americans signing up to help share the risk with older, sicker consumers and keep costs from skyrocketing.

Lewis credits MCHO’s early numbers to several factors. On prices, the nonprofit is competitive with Anthem. The benefits offered through MCHO’s plans also stress improving health, such as by supporting preventive care and better management of chronic diseases, Lewis said. MCHO’s network of health providers includes all of the state’s hospitals, he said, unlike Anthem, which excluded some central Maine providers as part of a strategy to strike money-saving deals with other hospitals.

Some consumers also are drawn to MCHO’s local, nonprofit roots, Lewis said.

Along with differences in the two insurers’ offerings, another possible explanation for MCHO’s early lead, if it pans out, is marketing, said Cooke of Pierce Atwood, which has represented Anthem in the past.

While Anthem is a “household name,” MCHO’s staff have “assiduously involved themselves in outreach and promotion from an early stage,” Cooke said.

The nonprofit, which is barred from using the federal dollars for marketing, attracted money from several foundations to fund an ad campaign that began over the summer, Lewis said.

Maine consumers shopping on healthcare.gov who need coverage in the new year now have more time to sign up. The nation’s largest organization of health insurers on Wednesday voluntarily agreed to extend the payment deadline from Dec. 23, giving consumers until Jan. 10, 2014 to pay and still receive coverage that takes effect Jan. 1. Both MCHO and Anthem’s parent company, Wellpoint, announced they would adhere to the new deadline.

In addition to extending the payment deadline, MCHO also said customers can now enroll through Dec. 31 for coverage that starts Jan. 1, 2014.

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