Highmark prepares to roll out health plans
Insurers offer alternatives to Affordable Care Act
Highmark and other health insurance carriers are eyeing offering individual and small group alternative policies to the Affordable Care Act that come with lower premiums and fewer benefits.
Mark Nave, senior vice president of individual and small group markets at Highmark, said the Pittsburgh insurer’s plans could go on sale as early as September when new U.S. Department of Labor rules allow the coverage to become effective.
The policies will be available to individuals, including sole proprietors, regardless of medical history, and to small groups that join associations to buy health insurance.
Until now, individual and small group health insurance plans were required to include 10 essential benefits, a rule that critics said reduced flexibility while driving up costs. Big employers are often selfinsured, exempting them from the Affordable Care Act’s coverage mandates.
“It gives them more access to more choices,” Mr. Nave said about the individual and small group market.
In a statement, UPMC Health Plan said it was reviewing Tuesday’s labor department rule change while continuing to offer “both current and prospective clients a range of health coverage options designed to fit the unique needs of their employees and families.”
Following an executive order last year by President Donald Trump, the labor department this week issued guidelines for association health plans. Among the benefits that won’t be required in the plans, but are part of ACA plans, are coverage for prescription drugs, free annual physicals, mental health care and labor and delivery.
“You don’t have to have the stuff that adds to cost,” said Rick Galardini, chairman and CEO of Wexfordbased JRG Advisors. “You can get rid of that. There’s a business opportunity here to get back to the future.”
The average association health plan will shave about 16 cents from every premium dollar paid for an Affordable Care Act plan, Mr. Galardini said. The ACA’s required essential benefits add 13 percent to 30 percent to the premium cost.
Pennsylvania Insurance Commissioner Jessica Altman and other critics worry that association health plans will siphon younger, healthier members from the ACA marketplace — leaving government plans with an insured pool of people who are older, sicker and costlier to treat.
Ms. Altman said the rule change “opens the door to allow for substandard coverage that will limit consumers’ access to comprehensive health care.”
Highmark’s Mr. Nave disagreed, saying the Pittsburgh insurer does not anticipate any “material impact” on ACA plans from the new coverage, even as so-called “Obamacare” enrollment has fallen locally and nationwide since it was fully implemented in 2015. Highmark’s ACA plan enrollment totals about 100,000 in Pennsylvania, West Virginia and Delaware.
About 15 million Americans who work for a small business or operate a sole proprietorship and their families lack health insurance, so association health plans could meet a need. Congress voted to end the federal requirement that everyone have health insurance in December and the penalties for not having coverage expire next year.
The Congressional Budget Office estimated that 400,000 people who are uninsured will sign up for association health plans, resulting in 4 million additional people enrolling in the new plans by 2023.
“It’s all about trying to get more people covered,” said Dave Scott, vice president of Bethel Park-based ARMS Insurance Group. “What’s the best way to do that?”
The pt Group Physical Therapy, which employs 50 to 100 people at five Pittsburgh area offices, says association health plans may be the answer. The attraction is flexibility in plan design, said Walt Henry, partner and director of marketing.
“We’re going to have to look at it for our employees, definitely,” Mr. Henry said. “It’s the flexibility more than anything else. That’s what ‘Obamacare’ could not do.”