Insurers back away from Corbett's Medicaid expansion plan

Alex Nixon
| Tuesday, Oct. 7, 2014, 10:51 p.m.

Some health insurers are having trouble finding doctors and hospitals to accept low rates under Gov. Tom Corbett's Medicaid expansion plan, leading one company to quit the program and another to reduce participation.

Highmark Inc., the state's largest health insurer, said it won't participate in Corbett's Healthy PA program because it couldn't sign enough doctors to its network. Healthy PA is an alternative to Medicaid expansion under the Affordable Care Act, proposed by Corbett and approved by the federal government in August, in which private insurers provide coverage to Medicaid recipients.

“Given the challenge and the short timeframe to contract with physicians, we found it challenging to get rates that were financially viable,” Highmark spokesman Aaron Billger said.

Highmark was one of nine insurers that signed up to provide coverage. It intended to offer private Medicaid plans in two of nine regions in the state.

Gateway Health Plan, which is 50 percent owned by Highmark, will offer the coverage in those regions and in most of the rest of the state.

UPMC Health Plan may reduce the number of regions where it is participating from five to four, said John Lovelace, president of the health giant's Medicaid products unit.

UPMC Health Plan hasn't made a final decision but is considering not offering private Medicaid plans in central Pennsylvania because it doesn't have a presence there, making it more costly to contract with doctors and market its products, he said. The company is committed to four regions in Western Pennsylvania.

The Corbett administration in June said at least three insurers would compete for Medicaid business in each of the nine regions.

Kait Gillis, a spokeswoman for the state Department of Public Welfare, said Tuesday that there should be at least two carriers per region. But a final list of carriers won't be available until next month, she said.

She declined to comment further.

Newly eligible Medicaid recipients can begin signing up for coverage for 2015 on Dec. 1.

Other insurers said they haven't changed their plans.

Geisinger Health expects to offer private Medicaid coverage in three regions in the central part of the state but is still negotiating with doctors and hospitals, said Amy Bowen, a spokeswoman for the health system's insurance arm.

She said Geisinger and other insurers were having some trouble convincing doctors to accept Medicaid's low rates.

“We're pretty confident in our ability to build a network,” she said.

Capital Blue Cross, Independence Blue Cross and Health Partners Plans have not altered their plans, representatives said.

Aetna did not respond to a request for comment. United Healthcare would say only that it is working to finalize its plan offerings.

James McTiernan, a health insurance consultant with Downtown benefits firm Triad Gallagher, said the Medicaid program offers the lowest reimbursement rates, compared to Medicare and commercial insurance. It's not surprising that some insurers would have trouble making the program financially feasible.

“Obviously, they're having a hard time finding the right price points with providers to make this thing viable,” he said.

Alex Nixon is a Trib Total Media staff writer. Reach him at 412-320-7928 or anixon@tribweb.com.

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