Medicare enrollment shifts in Western Pennsylvania
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 1⁄2 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 1⁄2 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 1⁄2 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 firstname.lastname@example.org.
Add Alex Nixon to your Google+ circles.
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.
- Energy companies vie for experienced workers with skills in high demand
- U.S. Steel plans to close two plants affecting 545 workers
- MSA Safety products in demand to protect workers in dangerous jobs
- Emergency room visits decline as navigators steer patients to proper medical care
- U.S. Steel warns it may lay off almost 2,000 workers in Alabama, Texas
- Drillers bid millions for oil, gas beneath West Virginia public lands
- Bank of New York Mellon 4Q earnings rise to $793 million, but revenue sluggish