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Medicare enrollment shifts in Western Pennsylvania

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Thursday, Feb. 13, 2014, 12:01 a.m.

Highmark Inc. is losing some of its luster as the insurer of choice for Western Pennsylvania's seniors seeking more robust Medicare coverage.

The company's dominance in Medicare Advantage plans is eroding as competitors take a bigger piece of a market that's expanding as large numbers of baby boomers hit retirement.

The decline in members arises as the company is forced to raise premiums to offset lower reimbursement rates. A downgrade in the government's quality rating of one of its plans isn't helping.

Highmark's share of the private health plans funded through the government's Medicare program for Americans 65 and older dropped below 50 percent for the first time in at least four years in 2014, according to federal data. It was 48.6 percent on Jan. 1, down from 61.1 percent in 2010.

Highmark lost share primarily to three competitors — UPMC Health Plan, HealthAmerica and Gateway Health. Officials with UPMC Health Plan, Aetna and Gateway declined to comment.

UPMC Health Plan, Highmark's chief rival, has 26.3 percent of the market this year, up from 22.3 percent in 2010. HealthAmerica, a subsidiary of national carrier Aetna Inc., has jumped to 14.3 percent this year, up from 9.8 percent four years ago. And Gateway Health, which is 50 percent owned by Highmark, stood at 6.2 percent after entering the market in 2011.

The number as of Jan. 1 may be incomplete. The Centers for Medicare & Medicaid Services will released final 2014 numbers this month.

The erosion in Highmark's share occurs as enrollment in Medicare Advantage plans in the Pittsburgh region is expanding — growing 18 percent since 2010 to nearly 307,000 people this year, according to data from the Centers for Medicare & Medicaid Services.

Tim Lightner, the Highmark vice president overseeing its senior markets, said the insurer has lost members because it has had to increase premiums and lower benefits in response to reduced government funding. But he said the insurer is gaining outside Pennsylvania.

“Highmark has added significant Medicare Advantage PPO membership outside of Pennsylvania over the past couple years through large employer groups,” he said.

Highmark's statewide Medicare Advantage membership accounts for about 6 percent of its total health plan membership of more than 4 million people.

Highmark's enrollment this year also may have been hurt by a downgrade in the government's quality rating of one of its plans. The company sells two types of Medicare Advantage plans, Security Blue and Freedom Blue.

Freedom Blue was rated 3 12 stars on the government's five-star scale for 2014, down from four stars last year. Security Blue remains at four stars.

HealthAmerica's plans received a rating boost, rising from four stars last year to 4 12 stars for 2014, making it the highest rated Medicare Advantage carrier in Western Pennsylvania.

UPMC's plans are rated four stars, unchanged from last year. Gateway is rated 3 12 stars, also unchanged from last year.

Medicare Advantage payments were cut by 6 percent for this year, said America's Health Insurance Plans, an Alexandria, Va.-based trade group, resulting in cost increases and benefit cuts of $30 to $70 a month. If the program cuts payments by another 6 percent, AHIP estimated, benefit would be reduced and premium increased by $35 to $75 a month.

“Seniors cannot afford another round of rate cuts to their Medicare Advantage coverage,” said Karen Ignagni, the organization's CEO.

The Centers for Medicare & Medicaid Services will propose next year's rate this month and set final rates in April.

Medicare beneficiaries are not affected by the reimbursement contract dispute between Highmark and UPMC.

Highmark Medicare Advantage plan members will continue to have in-network access to UPMC hospitals and doctors after this year when the contract expires. Highmark's commercial, non-Medicare membership will have to pay costly, out-of-network charges to access UPMC starting in 2015.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or

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