Western Pa. insurers take steps to prep for health care marketplace
By Alex Nixon
Published: Saturday, Feb. 23, 2013, 8:40 p.m.
Health insurance companies in Western Pennsylvania are gearing up for the largest open enrollment period in history, which begins in less than eight months.
An estimated half-million people in the region who don't have coverage or who buy it themselves are expected to log onto an online marketplace to shop for health insurance starting on Oct. 1.
That flood of potential customers — mandated by President Obama's signature law, the Affordable Care Act — represents a boom for insurers that will offer health plans through the marketplaces known as health insurance exchanges. The health law requires that most Americans buy insurance starting next year if an employer doesn't provide it.
“We expect there to be a fair amount of competition” between insurance companies, said Diane Holder, CEO of UPMC Health Plan, the insurance subsidiary of the region's largest health system.
Holder said UPMC Health Plan, the second-largest health insurer in Western Pennsylvania, is preparing insurance products to offer on the exchange.
“The insurance companies are just scrambling to try to get ready for 2014,” said Tom Tomczyk, principal in the health care practice of Buck Consultants, Downtown. “I think they're scrambling because they're trying to figure out how to best manage the plans to make them cost effective.”
Highmark Inc., the region's largest health insurer, is readying its health plans to offer to individuals and small businesses on Pennsylvania's exchange, which the federal government will run.
At the same time, Highmark is preparing for changes under the Affordable Care Act that will affect payments to hospitals and other medical providers.
Starting in 2015, government reimbursements to physicians will be tied to quality of patient care, not quantity of visits, tests or other procedures a doctor performs.
“We are preparing to do just those things across our network,” Highmark CEO William Winkenwerder said of the company's reimbursements to hospitals and physicians.
Though details need to be worked out, the basic idea is an integrated medical network, such as UPMC or the one Highmark is trying to build with its proposed acquisition of West Penn Allegheny Health System and other hospitals and doctor groups, would be paid a flat fee for providing care to a population, Winkenwerder said.
“It can work very well but it requires very good data and a lot of attention to cost,” he said.
Holder said UPMC's hospitals and doctors are ready for that change.
“We're confident that we will be in a terrific position” to deal with a focus on quality care, she said.
In addition to those changes, the Affordable Care Act is driving the high number of mergers in the insurance and hospital industries.
To provide insurance to a larger pool of people, insurers are buying other insurers, such as a deal announced last year in which Aetna Inc. will acquire Coventry Health Care Inc., which operates in Pennsylvania as HealthAmerica.
And, as seen in the ongoing battle between Highmark and UPMC, large hospital systems are competing to acquire smaller community hospitals and independent physician practices to make sure they have components to provide care for a large population.
“We have to acquire and assemble enough assets,” Winkenwerder said, referring to building Highmark's provider network. “But we don't want to continue down the path of a high-cost system.”
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- PNC plans to do away with tellers
- Pace of enrollments on Healthcare.gov more than double, government says
- Fliers to absorb increase in security fee
- Consol acquires drilling rights from Dominion
- Stocks decline on heels of record close
- Range looks to sell Texas drilling assets
- Unemployment rate falls as employers add 203,000 jobs nationwide
- American Eagle Outfitters’ quarterly profit down 68 percent
- Education Management Corp. suit settled for $3.4 million
- Poll: Women’s pay up, but so is negativity
- Modern ‘educational’ gifts entertain STEM kids