The Seattle Times
Originally published August 10, 2013 at
3:46 PM | Page modified August 10, 2013 at 6:50 PM
State rejection of 5 companiesf health plans draws criticism
Critics say that Washington statefs rejection of individual
health-insurance plans from five companies that applied to sell inside the newly
created exchange marketplace will limit consumer choices and hurt continuity of
care for those with low incomes.
By Carol
M. Ostrom
Seattle Times health reporter
When Washington state approved
individual health-insurance plans from four companies to be sold inside its
newly created exchange marketplace, it also rejected
efforts by five others.
Now, critics say that rejection will limit consumer choices and hurt
continuity of care for those with low incomes.
The plans, targeted at uninsured individuals, are a central feature of the Affordable Care Act,
which aims to offer insurance plans through state online exchanges, where
customers can easily compare plans and perhaps qualify for free or subsidized
premiums.
State Sen. Linda Evans Parlette, R-Wenatchee, said the state is moving in the
wrong direction — away from the stated goal of insurance exchanges to gincrease
choice and competition for health insurance.h
Her colleague, Sen. Michael Baumgartner, R-Spokane, called the insurance
officefs actions a gsignificant reduction in free-market competition.h
State Insurance Commissioner Mike
Kreidler said some plans had trouble securing adequate networks of providers
or meeting other commercial-market regulations, which he said can pose a
significant challenge.
gI fully support competition in the market, but itfs also my responsibility
to make sure that plans sold in Washington state comply with state and federal
law,h Kreidler said. gItfs also critical that if consumers buy a plan, theyfre
actually able to use the benefits theyfre promised.h
Other critics, including Alison Carl White, executive director of WithinReach, a nonprofit that helps
connect families with services, noted that three companies rejected for the Washington Health
Benefit Exchange have been approved for patients on Medicaid, the
state-federal insurance plan for low-income people.
Because those companies wonft be allowed to sell commercial plans inside the
exchange, low-income people, who are more likely to have fluctuating incomes,
wonft be able to stay with the same insurance company if their income rises to
the point they no longer qualify for Medicaid, she wrote in a blog
post. If they have to switch from Medicaid to a commercial plan inside the
exchange, they may have to move to a new doctor and provider network.
gI donft know about you, but I think insurance and health care are already
pretty complicated,h White said. gThe thought of having to switch my insurance
plans when my income level changes would be overwhelming especially if I was new
to having insurance, struggling to pay rent or feed my kids and make good
parenting decisions.h
On Aug. 1, Kreidlerfs office announced that 31 individual plans from four
companies were approved to sell inside the exchange.
The approved companies were Group Health Cooperative, BridgeSpan Health
Company (an affiliate of Cambia Health Solutions, the parent company of Regence
BlueShield), Premera Blue Cross and its subsidiary, Lifewise Health Plan.
The rejected plans were Moda Health Plan (formerly ODS Health), Kaiser
Foundation Health Plan of the Northwest, and three Medicaid plans: Coordinated
Care Health, a subsidiary of Centene Corp.; Molina Healthcare of Washington; and
Community Health Plan of Washington.
Because Lifewise is a subsidiary of Premera, noted Parlette, the Wenatchee
legislator, consumers in 19 counties who want to shop inside the exchange will
only be able to choose among plans from a single company.
Kreidler gave these reasons for the rejections:
• Molina didnft allow access to certain providers, and had no approved retail
pharmacy.
• Coordinated care had no pediatric hospital in its network, and no approved
vision network.
• Community Health Plan of Washington was unable to adjust benefits to meet
new cost-sharing requirements, Kreidler said. It also required people, even
those in an urban area, to drive more than 47 miles to see a cardiologist and
123 miles to see a gastroenterologist.
• Kaiser had several health-savings account (HSA) plans that didnft meet
state and federal requirements.
• Moda wanted to charge the same rates for plans with different benefits. For
example, it included pediatric dental benefits in some plans, but rates didnft
reasonably reflect difference in costs.
Kreidlerfs office said some of the plans were new to the commercial market,
gand itfs a big challenge to meet the criteria to enter that market.h
In Washington, about 1.2 million people, mostly children, are now covered by
Medicaid. The state expects provisions of the Affordable Care Act will add
nearly 330,000 more people, mostly adults, over the next few years.
Dr. Mario Molina, president and CEO of Molina, said Washington is the only
one of nine states that has rejected Molinafs bid to sell inside an exchange.
Currently, Molina, which has operated in Washington since 2000, covers about
413,000 Medicaid patients in the state, and has a large network of providers,
including a pharmacy network, Dr. Molina said.
About 10 to 15 percent each year fall off Medicaid because their incomes have
risen, and should be eligible for subsidies inside the exchange, he said.
But now, they wonft be able to stay with Molina if theyfre not on Medicaid.
gPeople will have to change health plans, and in many cases, change doctors,h he
said. That seems to run counter to the notion of promoting continuity of care
and making the marketplace more competitive, he said.
Community Health Plan of Washington, which covers about 305,000 individuals
and families through Medicaid plans, said the rejection was a surprise and would
have negative consequences for the most vulnerable population.
In a statement, the company said its proposed gmember-focused and innovativeh
plans were designed to address gthe unique needs of lower-income individuals.h
The plans offered unrestricted access to the First Choice Health Network,
including a group of Community Health Centers with more than 100 primary-care
centers.
gUnfortunately, the OIC seems unable to move away from an outdated model of
commercial insurance, which the Affordable Care Act was intended to reform,h the
company said.
Coordinated Care spokeswoman Sally Mildren said the company believes being
able to sell inside the exchange is important to help low-income customers. But
she said Coordinated Care will work closely with the insurance office in hopes
of being able to get approval next year.
Kreidler said itfs not surprising there was a lot of confusion the first year
of the new requirements. Now, both his office and the companies have a much
clearer understanding of whatfs needed, he said. For 2015, theyfll begin working
with companies as early as March and April, he said.
gWhile I wish all of the companies who applied had succeeded, I had to hold
everyone to the same standards,h Kreidler said. Many more companies have filed
to sell dozens
of plans outside the exchange, which the insurance office has until the end
of September to approve or reject. Individuals who purchase insurance plans
outside the exchange will not be eligible for the reduced premiums.
Carol M. Ostrom: costrom@seattletimes.com or 206-464-2249. On Twitter
@costrom. This story was produced through a partnership with Kaiser Health
News.