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Highmark W.Va. gets competition from Kentucky in ACA marketplace

The Affordable Care Act health insurance marketplace in West Virginia will see a new element introduced to it in time for the 2015 open enrollment period — competition. Friday was the deadline for insurance providers to enter the ACA marketplace.

Highmark West Virginia, previously the only insurer in the state’s ACA insurance exchange, will be joined by the Kentucky Health Cooperative, which will create its own West Virginia Health Cooperative and has already been licensed by the West Virginia Insurance Commission, according to Tonya Gillespie, regulatory assistant commissioner for the WVIC.

“We’re excited to have two. I think it helps our marketplace; competition can be positive,” Gillespie said. “We’re looking forward to [the Kentucky co-op] joining our marketplace and offering services to our citizens. We’re thankful our consumers have options now, because that’s a good thing.”

The co-op has had its insurance products approved by the state, according to Susan Dunlap, communications representative for the Kentucky co-op. Health insurance cooperatives, unlike private health insurance companies, are owned by the people it insures. Co-ops like the Kentucky Health Cooperative are not government-run, and are designed to provide an alternative to state-provided and single-payer insurance coverage. 

The Kentucky co-op was created a year ago in response to the implementation of the ACA. Like other cooperatives that have been established across the country, it will receive federal funds as it enters the marketplace to cover its overhead costs, but will function as a non-profit, Dunlap said. 

Fred Earley, president of Highmark West Virginia, said Highmark Inc., a not-for-profit organization that covers 5.3 million people in West Virginia, Pennsylvania and Delaware, is structured so that although it doesn’t have shareholders or pay dividends, it pays federal taxes. 

“We pay federal taxes, and entities like the co-op are initially funded by federal taxes,” Earley said. “We’ve always viewed ourselves differently because we’re a not-for-profit and don’t have to respond to shareholders of Wall Street-type demands, so that makes us different than some other national competitors that have not chosen to come into West Virginia to offer ACA plans.”

According to Earley, Highmark priced its 2014 plans in anticipation of competition, and said the company will likely have similar offerings in 2015. 

“We’ll stay true to our principles, mission and values, just as we always have,” Earley said. “We will still have a full array of products, and we have made some adjustments to reflect what we think is the full array of what is appropriate for the West Virginia market.” 

Because it is competitive and proprietary business information, neither Highmark nor the co-op can discuss their pricing and products in detail before the next enrollment period. Brandon Merritt, a health policy analyst for the West Virginia Center on Budget and Policy, said that despite difficulty in predicting how things will go in the 2015 marketplace, the added competition should be beneficial for consumers.

There’s no real downside,” Merritt said. “The sustainability of the new co-op remains to be seen over the long term, but anytime providers have to compete for business, the customers are the big winners.”

Perry Bryant, executive director of West Virginians for Affordable Health Care, said it is nearly impossible to determine at this point whether either agency has an advantage going into 2015.

“We just don’t have enough information at this point. You’d want to know their premiums, their deductibles, their co-pays, how extensive their network is — there is a lot of detail that hasn’t been released yet,” he said. “It really isn’t clear at this point.”

For Bryant, the competition itself is what is important — unlike the health insurance landscape prior to the ACA, companies participating in the marketplace aren’t familiar with their competitors’ prices and offerings before the start of the open enrollment period. Bryant said that atmosphere, coupled with competition, could cause companies to price their plans more conservatively.

“They want to be as low as they can be without losing money,” he said. 

The primary difference between the two companies, according to Bryant, is how established they are in their respective service areas. While the co-op was created last year, Highmark has been the largest health insurer in West Virginia for nearly a decade.

“Highmark’s business model has been to create a very extensive network, so that if someone looks to see that they work with their doctor or their hospital, it’s likely yes,” Bryant said. “It think that could make a difference, as well.”

Reach Lydia Nuzum at or 304-348-5189. 

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