Highmark, UPMC expect to dominate exchange
The two biggest health care organizations in Western Pennsylvania are likely to dominate the virtual marketplace where individual health insurance buyers will begin shopping for coverage later this year.
Highmark and UPMC, which are competing head to head in the hospital business, plan to offer a wide variety of plans for individuals in the marketplace, which the federal government is setting up in Pennsylvania under the Affordable Care Act, their executives said Tuesday.
Meanwhile, four national for-profit carriers that do business in Pittsburgh said they either wouldn't participate or declined to disclose their plans. The comments were made during a forum on Tuesday sponsored by the Pittsburgh Business Group on Health, an organization representing many of the region's largest employers.
People who don't receive insurance from an employer will be able to buy subsidized coverage through the marketplace starting Oct. 1.
As of Jan. 1, 2014, nearly all Americans will be required to have health insurance, a major provision of the Affordable Care Act.
The federal government has touted the marketplaces, known as exchanges, as a place where many insurance companies will compete vigorously for business from the millions of Americans expected to buy coverage for the first time.
In Pennsylvania, an estimated 500,000 people are predicted to buy insurance through the exchange.
But if only two of six insurers here offer health plans in the exchange, lower prices that are the promise of robust competition may not materialize, said James McTiernan, a health care consultant with Triad Gallagher, a Downtown benefits consulting firm.
“It was designed to create competition,” McTiernan said.
“If anything it's going to compress it a little bit, at least in the short run,” he said, referring to competition. “Obviously, the more compressed the competition the higher the prices are going to be; it's only natural.”
McTiernan said he wasn't surprised to hear that the national insurers — Aetna Inc., Cigna Corp., United Healthcare and HealthAmerica — would sit on the sidelines the first year and try to figure out if the exchanges will be profitable.
“There's lots of things they're going to watch closely,” he said.
Cigna and United both said Tuesday they won't participate in the exchanges in 2014, but their executives did not rule out the possibility in 2015 and later years.
Aetna hopes to offer plans on exchanges in 14 states, said Colleen Rackley-Cuda, senior program director for health care reform. But the Rackley-Cuda wouldn't say which states until the federal government signs off on Aetna's products. The company owns HealthAmerica, a subsidiary of Coventry Health, which Aetna purchased last week.
The Department of Health and Human Services, which is charged with setting up Pennsylvania's exchange, is still reviewing proposals from insurers and could not comment on which companies would be participating, spokeswoman Lorraine Ryan said.
Antoinette Kraus, project director of the Pennsylvania Health Access Network, said it's too early to know that only two health insurers will offer products to individuals in Western Pennsylvania. And even if a small number participate initially, Kraus predicted more companies will see the benefits in coming years.
“As more and more people understand the benefits and start buying on the exchanges, there will be more insurers that want to compete on the exchanges,” she said.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or email@example.com.