Dou­ble-digit pre­mium hikes ‘likely’ for 2015 ex­change plans

Modern Healthcare - - Q & A -

A lit­tle over a year ago, Joseph Swedish took over the reins of Wel­lPoint, the $71 bil­lion in­sur­ance gi­ant whose plans and af­fil­i­ates fi­nance the health­care needs of nearly 70 mil­lion in­di­vid­u­als. A vet­eran hospi­tal ad­min­is­tra­tor who pre­vi­ously ran Livo­nia, Mich.-based Trin­ity Health, Swedish switched sides at a time of ma­jor chal­lenges for the In­di­anapo­lis-based in­surer. Its pre­vi­ous chair­man had left un­der a cloud just six months be­fore the roll­out of the Pa­tient Pro­tec­tion and Af­ford­able Care Act’s health in­sur­ance ex­changes. In this in­ter­view with Mod­ern Health­care Edi­tor Mer­rill Goozner, Swedish re­flected on the first six months of open en­roll­ment and what we might ex­pect in the months ahead. Be­low is an edited ex­cerpt.

Mod­ern Health­care: Give us your eval­u­a­tion of how open en­roll­ment has gone, both from an over­all per­spec­tive and from your own com­pany’s per­spec­tive.

Joseph Swedish: The en­roll­ment process was rocky be­gin­ning in Oc­to­ber. Ob­vi­ously, we adapted, in some cases rea­son­ably well. In other cases, it was a tough go, be­cause the shifts changed the dy­nam­ics of how we priced as well as how we po­si­tioned our­selves to se­cure en­roll­ment.

Hav­ing said that, we be­lieve Wel­lPoint is well­po­si­tioned. We seem to have ac­cu­mu­lated a lot of mem­bers.

In some states, such as Cal­i­for­nia, we’re in the leading mar­ket share po­si­tion, and over­all, we re­ally like our chances in terms of en­roll­ment up­take in many, many states. When you put it all to­gether, it seems as if we have come upon a rea­son­ably good mo­ment in time with re­spect to the March 31 end of open en­roll­ment.

MH: Is en­roll­ment dis­pro­por­tion­ately weighted to older and sicker people?

Swedish: We are one story among many sto­ries of par­tic­i­pat­ing health plans. A lot de­pends on how you mod­eled what you thought would play out, with re­spect to age and acu­ity lev­els among the en­rollees. It ba­si­cally has turned out as we ex­pected. That’s why we feel rea­son­ably pos­i­tive about what we’ve ac­cu­mu­lated.

Could it be bet­ter? Yes, al­ways, in our world of be­ing an in­sur­ance com­pany.

MH: The Obama ad­min­is­tra­tion has made a lot of changes in the rules, such as post­pon­ing the small busi­ness ex­changes. How has that af­fected the en­roll­ment process for you as you look to­ward 2015?

Swedish: It’s re­ally hard to hit the bull’s-eye when the rules have changed. It’s just the re­al­ity of how these kinds of na­tional pol­icy roll­outs evolve.

Ev­ery­body ex­pects change. We are adapt­ing, and I think for 2014, we see a pic­ture that is not ter­ri­ble. It’s just that we would have liked more pre­dictabil­ity.

Look­ing for­ward to 2015, there are just so many un­knowns. We are try­ing to eval­u­ate what it means as we pre­pare for pric­ing re­leases in May.

Over­all, it re­ally is too early for me to com­ment on 2015.

MH: Tow­ers Wat­son and oth­ers have put out re­ports that in the main in­sured mar­kets we’re go­ing to see mod­er­ate in­creases pretty much in line with health­care costs, which have been mod­er­ate. On the other hand, in the ex­change mar­kets, do you think there are go­ing to be pretty high in­creases?

Swedish: The pub­lic com­men­tary from us, as well as our peers, is that there will un­doubt­edly be re­mark­able price in­creases.

In terms of scale, we just don’t know right now, and we’re go­ing to have to eval­u­ate the mem­ber­ship we have se­cured through March 31, and then be­gin pre­dict­ing what additional mem­ber­ship we might be able to pick up, be­gin­ning in the next cy­cle.

The re­al­ity is, with all the changes that oc­curred, there will be an uptick in pre­mium costs.

Many of the prog­nos­ti­ca­tors are claim­ing dou­ble dig­its. Is that true? We just don’t know right now, but it does ap­pear as if it’s likely.

“It’s re­ally hard to hit the bull’s-eye when the rules have changed.”

MH: If we see dou­ble-digit rates when the new pre­mi­ums come out in July, will that be a sig­nal that Oba­macare is a fail­ure?

Swedish: Not at all. We’ve cre­ated ac­cess for many, many people who have not had ac­cess. The sta­tis­tics are still com­ing to­gether to pass judg­ment on just how many have en­tered that have never had health in­sur­ance, or did not have it for quite some time. So in that re­gard, I think there is suc­cess. From an­other per­spec­tive, there are many who have en­tered by way of sub­si­dies. They have been given an af­ford­abil­ity op­tion that they pre­vi­ously did not have ac­cess to. We be­lieve our plan of­fer­ings are very high qual­ity and rea­son­ably priced, rel­a­tive to the value that en­rollees are ac­quir­ing. So all in all, I think there are a lot of rea­sons to cel­e­brate suc­cesses. The flip side is, ab­so­lutely there are chal­lenges we’re go­ing to have to work out. But we be­lieve this will work out over time. I think we have to be pa­tient.

MH: What is Wel­lPoint do­ing in terms of work­ing with providers to im­prove the qual­ity of care and tar­get pop­u­la­tion health?

Swedish: I can give you one ex­am­ple. Emory Univer­sity Health Sys­tem just an­nounced a part­ner­ship with us where our CareMore oper­a­tion is go­ing to part­ner with them to man­age the frail el­derly around is­sues of read­mis­sion and the chronic ill­nesses they face. We will ba­si­cally be em­bed­ded in Emory and pro­vide clin­i­cal sup­port in an area that is a very dif­fi­cult man­age­ment propo­si­tion for clin­i­cal care. So we are rapidly be­gin­ning the provider col­lab­o­ra­tion that many have en­vi­sioned. We be­lieve there will be many like that in the near fu­ture, as providers and pay­ers meld to­gether to cre­ate so­lu­tions and im­prove care, out­comes and pa­tient safety.

MH: What do you think about the at­tacks on health plans of­fer­ing nar­row provider net­works?

Swedish: There are a lot of pos­i­tives that go with so­called nar­rower net­works. We be­lieve, and it’s em­bed­ded in the Af­ford­able Care Act, that net­work con­fig­u­ra­tions do make a dif­fer­ence in pro­vid­ing qual­ity and price per­for­mance that’s at­trac­tive to con­sumers. Pay­ers are se­lect­ing providers. But providers are se­lect­ing pay­ers, too. Choices are be­ing made by providers and pay­ers to cre­ate some­thing of value for con­sumers. In many, many mar­kets, there are mul­ti­ple op­tions for so-called nar­row net­works. In some mar­kets, there are a limited num­ber of op­tions. Over time, the mar­ket­place will sort this out very ef­fec­tively as new en­trants come into the land­scape and of­fer prod­ucts that com­pete against an­other nar­row net­work.

So my ad­vice is, let the mar­ket pre­vail. Over time it will work out.

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