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2 insurers in small-business health insurance marketplace

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By Bill Poovey
Published Nov. 10, 2015

Two health insurers in South Carolina are selling small group coverage plans, and four are selling individual plans for 2016 in the Federal Health Insurance Marketplace following Consumers’ Choice exiting the market at year-end. Enrollment opened Nov. 1 with BlueChoice Health Plan and BlueCross BlueShield of S.C. as the small group program participants. Aetna Health Inc., Blue Choice Health Plan, Blue Cross BlueShield of S.C. and United Healthcare Insurance Co. are offering individual plans.

Small Business Health Option Program issuers, premium written this year and average rate change for 2016:

Small groups are two to 50 insured

  • Blue Choice Health Plan: $34.2 million, + 0.73%.
  • BlueCross BlueShield of S.C.: $126 million, +0.91%.

All Small Group Market issuers, amount of premium written this year and average rate change for 2016:

  • Aetna Health Inc.: $30.6 million, +8.40%.
  • Aetna Life Insurance Co.: $176,577, +7.50%.
  • BlueChoice Health Plan: $34.2 million, +0.73%.
  • BlueCross BlueShield of South Carolina: $126 million, +0.91%.
  • Coventry Health & Life Insurance Co.: $268,112, +8.30%.
  • Federated Mutual Insurance Co. (no premium written this year): 0.00%.
  • United Healthcare Insurance Co.: $48.4 million, +3.78%.
  • United Healthcare Insurance Co. of the River Valley: $40.9 million, -2.25%.

Individual Market issuers offering plans through the Federal Health Insurance Marketplace, amount of premium written this year and average rate change for 2016:

  • Aetna Health Inc.: $78 million, +31.80%.
  • BlueChoice Health Plan: $207.8 million, +8.89%.
  • BlueCross and Blue Shield of South Carolina: $226.2 million, +8.66%.
  • United Healthcare Insurance Co. (no premium written this year): 0.00%.

SOURCE: S.C. Department of Insurance

Other coverage plans are available in the private market, but the only way to access a tax credit or subsidy is the marketplace, Ray Farmer, S.C. Department of Insurance director, said. The enrollment period continues through Jan. 31. Coverage purchased by Dec. 15 will take effect Jan. 1. Enrolling after Dec. 15 starts coverage Feb. 1.

Farmer said consumers should shop and “look at our website. They can compare. Look at our rate increases” and contact a local insurance agent. He said there were 168,000 South Carolinians receiving health coverage through the exchange in June and 91% of those received a subsidy.

Consumers’ Choice Health Plan, which this year is providing coverage for 67,000 small business and individual customers in South Carolina, was among scheduled marketplace participants but is ending coverage Dec. 31 due to a “hazardous financial condition,” Farmer said. The federally backed nonprofit cooperative has operated offices in Greenville, Columbia and Charleston since 2013. Farmer said Consumers’ Choice customers will continue to have coverage through year’s end and providers will be paid in full.

Adrian Grimes, the cooperative’s vice president of corporate communications, did not return telephone and email messages seeking comment.

Consumers’ Choice is among a growing number of federally backed cooperatives nationally that have announced they are ending operations, including about six in recent weeks. The Centers for Medicare and Medicaid Services recently announced they will get less than 13% of funding that had been requested to keep them operating.

Jerry Burgess, president and CEO of Consumers’ Choice, said in the department statement that the “recent announcement of a risk corridor reimbursement of just 12.6% casts doubt on the collectibility of tens of millions of dollars through the federal risk corridor program and led to an unavoidable outcome.”

A July report by the U.S. Department of Health and Human Services Office of the Inspector General showed Consumers’ Choice had premiums of $165 million, $29 million in other revenues and adjustments, $173 million in claims expenses and $25 million in general administrative costs, which amounts to a $4 million net loss. The report before the announced cut projected a net loss this year and net income of $1 million in 2016.

Burgess is also CEO of Knoxville, Tenn.-based Community Health Alliance, a nonprofit health insurance cooperative founded with $73 million in federal loans. Community Health Alliance has also announced it will not offer coverage in 2016.

“This was a difficult decision for the insurer and this agency, but this is what is in the best interests of S.C. consumers and health care providers,” Farmer said in a department statement.

Farmer said in an interview that customers of Consumers’ Choice, which was started from an $88 million federal loan, has about 100 employees. He said the department “will do everything it can to assist South Carolinians through this process.”

United Healthcare is the lone newcomer among the four participating individual market insurers. Coverage with Coventry is being offered under the name of its owner, Aetna Health, Farmer said.

A judge has approved a plan to partially pay hundreds of medical providers who are owed money by a Seneca-based health insurer that shut down due to fraudulent letters of credit. A state Insurance Department receivership has paid a “quarter on a dollar” to about 1,700 providers stuck with claims totaling $11.1 million from the collapse of the S.C. Health Cooperative.

The Consumers’ Choice shutdown differs from the department’s takeover of the Seneca-based S.C. Health Cooperative in late 2014. Farmer is overseeing a court-approved receivership plan that was started following a discovery that the cooperative used two letters of credit totaling $8 million that turned out to be fraudulent. Health care providers in that case are not being fully paid for claims.

Reach Bill Poovey at 864-235-5677, ext. 104

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