LEWISTON, Maine — When Kevin Lewis helped start Maine Community Health Options in 2011, the health insurance co-op had no employees and no one banging down the door looking for health insurance (it didn’t actually have a door, either).
No one knew how a health insurance co-op would do in Maine, mostly because co-ops never existed before the 2010 Affordable Care Act allowed for their creation. Could an insurance company run by members for members — like a credit union — compete with traditional, powerhouse insurers like Anthem Blue Cross and Blue Shield? Would people take a risk on the new guy in town?
Lewis and his partner thought MCHO would be doing well if it got 15,500 members in 2014, its first year selling and administering insurance plans. They figured MCHO might hit 40,000 members some day, somewhere around the year 2019.
They were very wrong.
In a good way.
Today, a year after it started offering health insurance from its Lewiston headquarters in the Bates Mill, MCHO has more than 40,000 members — five years sooner than projected. It ruled the ACA marketplace in 2014, with 8 out of 10 Mainers signing up with MCHO rather than Anthem.
MCHO now employs 129 people, more than twice the workforce it had a year ago, and even that’s not enough; the co-op recently signed with a Fort Kent call center to help handle the call overflow. To accommodate its workers in Lewiston, MCHO has taken over both the second and third floors of the rehabbed mill building above DaVinci’s restaurant, converting the sprawling open floor plan to office space.
MCHO is doing so well in Maine that it can even afford to expand its reach. It’s now doing business in New Hampshire.
“Hopefully that means that people are getting into coverage … and that’s really what all this is all about, getting people into meaningful and affordable benefits,” Lewis said. “It’s an exciting time.”
MCHO was founded in 2011 with the backing of the Maine Primary Care Association, an Augusta-based group that represents community health centers. Lewis was CEO of the Maine Primary Care Association at the time. He and Robert Hillman, former CEO of MedNet, a Scarborough-based independent, physician-owned preferred provider organization, came up with MCHO.
“It goes back to the one observation that something had to change [in health care],” Lewis said in a Sun Journal interview in 2013, soon after setting up shop in the Bates Mill.
Today, Lewis is CEO of the co-op. Hillman is chief operating officer.
In the beginning, no one was sure co-ops would change anything in health care, but they hoped. The federal government gave hefty loans — nearly $2 billion in total — to about two dozen co-ops across the country in an effort to increase choice and provide an alternative to the politically dead public insurance option.
A few co-ops quickly faltered. Others did well until they had to start attracting members — then they found their prices were set too high to compete. Overall, nationwide, co-ops did OK in 2014.
But MCHO, which maintained rates lower than Anthem’s, offered unique program benefits and touted a broad network of doctors, did better than “OK.” In the world of co-ops, MCHO was a rock star.
“You’ve got a winner and a keeper up there, no question about it,” said Martin Hickey, CEO of co-op New Mexico Health Connections and board chairman for the National Alliance of State Health Co-Ops.
MCHO wasn’t without its problems. As demand swelled last year — taking even MCHO leaders by surprise — the co-op was overwhelmed and it struggled to handle calls. MCHO lost some of its local-business shine when members and potential members had trouble getting through to anyone who could help them. Healthcare.gov’s meltdown and ensuing enrollment problems didn’t help.
MCHO quickly made changes, dedicating additional people to outreach, education and business development, and sending even executives to man the phones. It figured out what callers’ common complaints were — they often involved sign-ups — and then focused on solving them.
The short-term problems didn’t scare many people away. When the dust settled, MCHO had grabbed 83 percent of ACA marketplace sign-ups in Maine. And 57 percent of all individual health plans — sold on or off the marketplace — went to MCHO.
It’s too early to say whether MCHO can repeat that performance in 2015, but Lewis believes the signs are positive. The company dropped its average rates, which were already lower than its main competitor, by nearly 1 percent. It’s seeing more interest from small and large businesses. And it’s selling in New Hampshire.
MCHO has also tweaked its benefits, offering a high-level platinum plan for the first time, embedding pediatric dental coverage into some health insurance plans and adding cardiovascular disease to its unique Chronic Illness Support Program, which helps patients better manage illnesses by offering free care, free or cheaper medications and closer monitoring.
To make sure it’s going in a direction that makes members happy, MCHO has added nine people to its Board of Directors, doubling the size. Most board members are now co-op members, people who buy and use its health insurance.
MCHO received $12.5 million in start-up money from the federal government and nearly $120 million to fund a reserve account to pay claims and maintain coverage as the co-op got going. It must start paying back that first loan in 2017 and the second loan in 2028.
Lewis doesn’t think that will be a problem.
“Without a doubt,” he said.
In 2015, MCHO will have to contend with more competition. Last year only MCHO and Anthem sold insurance to Mainers on the ACA marketplace, also called an exchange. Harvard Pilgrim Health Care has joined the fray.
Lewis is happy to see them join.
“We’re all about competition,” he said. “It’s good for everyone, really, to have a robust exchange.”