2013
I don’t know a thing about Fidelis Care probably because I don’t know much about Medicaid. Reading this story in the Wall Street Journal this morning it suddenly dawned on me that when it comes to health plans in the Obamacare exchanges I am out of touch. My world thinks of the big insurers like Aetna, Humana, United Healthcare, the Blues, etc. Now it appears we should be thinking more of start-ups, non-profit co-ops and Medicaid providers. In other words, insurers with limited, if any, experience dealing with large groups of middle class families with great expectations. I would also be concerned that in their enthusiasm to participate and be “competitive” their initial pricing could be way off base making 2015 very interesting. Only time will tell of course, but I don’t have a warm and fuzzy feeling.
If you are used to shopping at Macy’s or Nordstrom’s you may now be shopping at Costco or Wal-Mart.
About 26% of insurers filing to offer health coverage on the individual exchanges are new carriers, according to a McKinsey & Co. analysis of filings in 47 states and Washington, D.C. Some are Medicaid specialists, but others are plans aligned with large providers and health-care co-ops created with federal funds to provide additional competition to private insurers. The remaining 74% are insurers that already offer health coverage to individuals.
The Health Law Rollout
In states with a higher number of uninsured residents, there are more newcomers. In California, eight of the 12 insurers are selling commercial insurance to individuals for the first time, according to McKinsey. Four of Oregon’s 11 insurance plans are new. Statewide in New York, half of the 16 plans are testing the commercial insurance market for the first time.
In eight states where rate filings were publicly available, McKinsey found that two-thirds of the new entrants were priced below the median premium.
In New York, Fidelis Care, a large Medicaid provider in the state, will offer a 40-year-old, single male living in Manhattan who doesn’t smoke a monthly premium of $390.20, according to state filings of midlevel, silver-tier plans.
UnitedHealth Group Inc.’s UNH -1.74% plan, in contrast, costs $635.60 monthly. Government subsidies, should an individual be eligible, would bring down the out-of-pocket cost. Details on network design haven’t yet been released. But the federal government, under the new health law, determines what benefits a plan must provide.
Seven of the 10 plans in New York filed with the state so far are new entrants—including Fidelis. “We stay up at night worrying if we’ve priced this right,” said Rev. Patrick J. Frawley, chief executive at Fidelis.
The newer plans generally offer access to fewer doctors. Molina’s plans in Texas will have about 7,000 physicians. The state’s largest insurer, Blue Cross and Blue Shield of Texas, offers a network with around 40,000 physicians.
QUINNSCOMMENTARY 
Oops truncated my comment. It also means the insurers must have experience dealing with both the federal and state government officials … hence, Medicaid.
Look for the larger insurers to participate in the future once the exchanges are opened up to “applicable large employers” – a state by state decision starting as early as 2017.
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This is individual market and small group (SHOP). It will frequently mean low income as well ( 100 employees).
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