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After years of sitting back and watching how things would unfold, Wellmark Blue Cross and Blue Shield - the state's dominant insurer - will enter the Iowa exchange, selling subsidy-eligible plans.
But the company wants to take a different approach than other insurers, officials said, and it intends to sell what it believes are 'new and innovative” plans that include joint ventures with health systems and more predictable copays.
The company's reason is that Iowa's exchange landscape has been a bit tumultuous the past three years.
In December 2014, not-for-profit insurer CoOportunity Health was seized by the state and later liquidated - a saga still being played out as the state has filed a suit against the federal government in regard to the reasons for that company's demise. Just a few weeks ago, insurance giant United Health Group announced it would be withdrawing from all but a handful of the 34 states in which it operated, including Iowa.
'We saw a lot of products that had broad networks and not a lot of positive experiences for members. These products saw significant increase in premiums and other issues,” said Mike Fay, vice president of health networks at Wellmark during a phone interview. 'We were committed to going onto the exchange and felt (2017) was the right year.”
The Affordable Care Act's design was a bit like the game Jenga, said Laura Jackson, Wellmark's vice president for health care strategy and policy. It was designed with good intentions, but lobbyists and special interest groups pulled out pieces here and there and it lost some of its structural integrity.
No one insurer can add stability, Jackson said, but the company has watched and learned from other carriers' missteps and has taken a thoughtful approach in the plans it will sell.
'So while some have pulled out of the marketplace, and whether this is sane or not, we have decided to double down,” she said.
The Des Moines-based company said it has designed plans to help control premiums and provide better outcomes. In 2015, the 30,000 individuals with ACA plans used substantially more expensive services, the company said - for every $1 in premium paid, Wellmark spent $1.27 to pay for the cost of services.
For 2017, the company has proposed an average base rate increase for individual ACA plans of 38 percent to 43 percent. The increase in costs stems from serious health conditions, the company said.
About 30,000 of its 1.6 million customers, or 2 percent, have purchased individual ACA-compliant plans. Of those 30,000 people:
l There has been a 200 percent increase in the overall cost of care for health conditions greater than $100,000.
l The cost and volume of prescription specialty drugs increased by 100 percent over the previous year.
l 300 members drove 25 percent of the costs, which equaled $47 million.
'If it was me or my family member, I'd want that care,” Jackson said, noting those 300 individuals sought treatment for hemophilia, cancer, high-risk pregnancies, diabetes and morbid obesity. 'And the specialty drugs used to treat these conditions bring a big increase. ... They're getting the care they need, but everybody pays the cost.”
This coming open enrollment period - Nov. 1 to Jan. 31 - Wellmark will sell plans for 2017 that provide comprehensive services on more select networks, partnering with the University of Iowa Hospitals and Clinics and Mercy Health Network to create two new health insurance companies that both will work to collaborate and effectively deliver care.
It also will sell tiered copay plans in Iowa and South Dakota designed to provide more transparency and cost predictability. The plans give individuals a chance to know the costs up front, so they will be able to better track out-of-pocket maximums.
Wellmark worked with Connecticut-based consulting group VAL Health to design 'simple products that add context and certainty,” Jackson said. Wellmark held focus groups with physicians and consumers, she said.
The company also asked pharmacists across the state to 'grade” drugs, from 1 to 5, based on costs, safety and efficacy - the ability to reach an intended result. Those considered a level 1 drug - preventive drugs such as cholesterol medication Atorvastatin and insulin - are free. Level 5 drugs cost significantly more but have less demonstrated results.
Jackson said just because a drug is expensive does not mean it will be considered level 5, though. As an example, she mentioned drugs that can cure hepatitis C - while costly, curing that disease in the long run saves the company money so the drug may be considered level two or three.
Rather than offering plans with broad networks, Wellmark has opted to partner with health systems, creating two new health insurance companies. Both companies will sell to small groups and individuals on and off the insurance exchange.
Goals of these joint ventures is to provide collaborative care effectively and efficiently with higher patient satisfaction.
l Wellmark and UIHC will sell plans in Linn, Johnson, Scott and Des Moines counties under Wellmark Synergy Health. The new insurance plan will use University of Iowa Health Alliance-aligned providers as the core network for health care services, including University of Iowa Health Care, Iowa City; Genesis Health System, Quad Cities; Mercy Medical Center in Cedar Rapids; and Great River Health Systems, Burlington.
l Wellmark and Mercy Health Network will sell plans in 43 counties in the areas surrounding Des Moines, Clinton, Mason City, Sioux City, Waterloo-Cedar Falls under Wellmark Value Health Plan.
'The individual market (on the exchange) has been tough - to be successful we needed community providers that we could innovate around,” said Tom Newton, vice president of network engagement at Wellmark.
The UIHC joint venture is acting as an extension of sorts of the UI Health Alliance Accountable Care Organization (ACO) - a group of physicians and hospitals that work together to provide more coordinated and high-quality care.
'The ACO has transformed how care is delivered - keeping people healthy rather than the treating-the-illness model,” said Jennifer Vermeer, assistant vice president for medical affairs at UIHC.
The ACO still will exist outside the joint venture, officials said. But by doing business together as Wellmark Synergy Health, the two entities will be able to better share data and therefore manage chronic conditions.
The insurer will continue to reimburse physicians and hospitals on the network under a fee-for-service model, Newton explained, but that eventually could move to a capitated system.
'We've learned a lot - how to manage care, how to intervene with care plans and lifestyle changes,” Vermeer said. 'The ACO delivery system has reduced hospital and emergency department use. With (the joint venture), we will add special features and different ways to access care through telehealth services and virtual visits.”
Officials project this plan to attract about 2,500 people initially, and could add more counties and hospitals over time.
Wellmark Value Health Plan's network is built around Mercy's hospitals and physicians, Wellmark's Fay said, but the insurer also has reached out to more than 2,300 additional providers from orthopedics to mental health.
'The goal is to provide the appropriate care in an efficient setting,” said Steve Kukla, Mercy Health Network's vice president of operations and development. 'We want to proactively engage and the guide patients to a better health situation. This is all aimed at improving community health and in the process manage costs.”
The insurer anticipates the plan will attract about 4,000 people.
The trend of health systems partnering with insurers is becoming more common. UnityPoint Health announced in November 2015 that it would work with Minnesota-based HealthPartners to create a new insurance company that would sell Medicare Advantage plans.
'This is a great time of innovation and great challenges in health care,” Newton said. 'Entities are trying to figure out how to stabilize premiums. This is one possible solution.”
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