Maine health insurance co-op
keeps climbing steep hill
As most of its peers across the country face bankruptcy, Maine’s Community Health Options is staying alive as a business by trying to head upstream in the new healthcare economy.
Around the country, 11 of the 23 cooperative health insurance companies created with federal loans through the Affordable Care Act have shut down or are in the process, after becoming financially unviable in markets they were meant to help make more affordable and competitive. Another four of the co-ops are “hanging on by the skin of their teeth,” and five are “treading water,” according to health insurance analyst Charles Gaba, of the site ACA Signups.
Only two co-ops are actually turning a profit: Health Republic of New Jersey and Community Health Options, the Lewiston-based co-op with 64,000 Maine customers and some 80 percent of Mainers on ACA exchange plans.
Community Health Options has survived when so many other co-ops have withered in part because of “just right” premium prices, a federal market stabilization program and health plan designs that buck the national trend of limited doctor and hospital networks and increasing out-of-pocket costs.
“Our success speaks to the need for competition, additional choice and what insurance can and should be,” CEO Kevin Lewis said.
Now preparing to sell for 2016, in the third year of the ACA exchanges, Community Health Options has set its premiums at about the same rates or lower than Anthem Blue Cross and Blue Shield of Maine, the state’s largest insurer. Those lower premiums attracted lots of new customers, but “has also been sufficient to cover the claims,” Lewis said, speaking at the Aroostook Partnership meeting in Presque Isle recently.
Across the state, Community Health Options’ individual plan premiums are collectively increasing by only 0.5 percent over next year, while Anthem’s premiums are on average increasing by 4.8 percent and Harvard Pilgrim Health Care’s are being lowered by about 5 percent. In Aroostook County, Community Health Options is selling the lowest-priced individual exchange plans, including a silver-tier plan at $377 per month (before any tax credits) compared to $451 per month plan sold by Anthem.
Along with lower premiums, Community Health Options’ broad spectrum of doctors and hospitals has been a part of its appeal to Mainers, Lewis said.
“The main advantage is simplicity for our members. We haven’t put much value in the narrowing of a network simply to get a better rate. We see value on shining a light on where to get the best value for members and that value has to be both quality and cost.”
Lewis also argues that Community Health Options has pioneered so-called value-based insurance design, a model of lowering the costs members have to pay for beneficial tests and treatments.
This includes no co-pay generic medications available through Hannaford, year-round coverage for smoking cessation, no copays for any member’s first three behavioral health therapy visits, and a program offering members with diabetes, asthma, obstructive pulmonary disease and high blood pressure no-cost or lower-cost routine testing, medicines, doctor’s visits or equipment — all with the aim of keeping members living well, with chronic conditions, and able to avoid the need for advanced, sometimes risky hospital treatment.
“We want to swim upstream to reduce the total cost of care by getting people into services, to forestall acute crisis,” Lewis said.
Other insurers, including Anthem, are trying to pursue prevention, wellness and quality-based models of reimbursement, rather than paying providers “fee for service,” for every test and procedure. But Community Health Options has differentiated itself in trying to limit what patients have to pay in out-of-pocket expenses, said Sylvia Getman, CEO of The Aroostook Medical Center — even as the trend of high deductible plans continues to the point where today more than 40 percent of Americans with workplace-based insurance have a deductible of at least $1,000.
“Community Health Options has done a really nice job of making it accessible and usable, instead of really hitting people out of pocket,” Getman said. “It’s still an issue for us in Aroostook County. I still have concerns about high deductible health plans. I think that’s keeping people from getting care they need to maintain their health, not just waiting until an incident happens.”
Community Health Options’ health plans cover about 4,000 Aroostook County residents, with more than half receiving a cost-sharing reduction because they earn less than 250 percent of the poverty level. (For people at 250 percent, earning about $29,500 for a single person, annual out-of-pocket expenses are limited to $5,200.) Community Health Options also covers 300 Aroostook County employees from 37 small businesses.
Going forward, Community Health Options could still go the way of other co-ops — bankrupt and unable to operate alongside the large insurers that have dominated American healthcare since the end of World War 2, when the tax-exempt, employer-sponsored insurance model evolved. The creation of the co-ops was a compromise between lawmakers who wanted give young people the option to enroll in a public health plan akin to Medicare and those who wanted to preserve private health insurance but improve it.
Lewis, who led the Maine Primary Care Association for 10 years before helping start Community Health Options, said he thinks co-ops have made the most of a challenging situation, including the unexpected delay of federal stabilization revenue, while still bringing more consumer-friendly ideas to the market.
“We’ve been on an uphill climb that’s only gotten steeper.”
