Friday, September 13, 2013

Healthcare exchanges: the Devil (Highmark) is in the Details (Obamacare) ...

You should have been able to see this coming.

First, think about those healthcare exchanges, those Federal and State-run marketplaces for low-cost insurance.  In case you forgot, here's the promise from a Health and Human Services spokesperson:
"When the marketplaces open on Oct. 1, plans will have to compete side by side, and consumers will be able to choose the one that best fits their budget and needs," said Joanne Peters, a department spokeswoman.
Plans may be competing, but insurance companies?  Not so much.

As they say--the Devil (Highmark) is in the details (Obamacare).  Read on.

In nearby Pennsylvania, it does initially look like there will be competition: 
Most of the major Pennsylvania-based health insurers plan to offer products on the health insurance exchange set to open Oct. 1 as part of the Affordable Care Act, or Obamacare.
That includes four of central Pennsylvania's most prominent health insurers -- CapitalBlue Cross, Highmark, HealthAmerica and Geisinger Health Plan. Independence Blue Cross, the large Philadelphia-based insurer, also plans to sell products on the exchange.--snip--
Other Pennsylvania-based insurers that plan to sell products on the exchange include UPMC Health Plan, Keystone Health Plan Central and Keystone Health Plan East.  
 So that looks like eight insurance companies each competing for a share of 896,000 Pennsylvanians who can buy insurance from the exchange and qualify for Federal subsidies to help them with the premiums.
Not so fast.  Be sure to check out the very next line in the article:
Some of the insurers are subsidiaries of insurers including Capital and Highmark.
Uh, yeah.  I'm going to let you do the run-down of interlocking subsidiaries for yourself (it will take about an hour, and that's if you are good at it).  What you will ultimately find is that there are four, possibly five distinct insurers offering plans in PA, not eight.  And if the current breakdowns are any guide, better than 80% of the action will go to Highmark, Independence Blue Cross, and Capital Blue Cross, with UPMC picking up maybe 10%.

In other words--for those keeping score--expect Highmark to pick up roughly 265-270,000 new customers.

Now let's remember that in Delaware we also have an exchange, and that on our exchange you get to choose between Highmark and Coventry ... and Coventry.  Again, given reasonable projections, you can expect Highmark to pick up at least half of the 35,000 customers up for grabs, meaning about 17,000--and bringing  good old Highmark up to 287,000 new pieces of fresh insurance meat.

Better yet (from Highmark's point of view) is the fact that in West Virginia the 40-60,000 people purchasing insurance on the exchange will get to choose between Highmark and ... paying a fine for having no insurance.   You see, Highmark is the ONLY company offering plans on the oh-so-competitive WV exchange.

Conservatively speaking, we'll only give Highmark the median 50K new customers from WV, bringing our three-state total for the insurance company that Pennsylvanian Court of Common Pleas Judge Patricia McInerney referred to in a recent decision as "this supposedly non-profit corporation" which logged $1.2 BILLION in what the company characterizes as "incidental" profits.

So that gives Highmark most likely a Federally subsidized addition of roughly 335,000 new customers in PA, DE, and WV next year.  Please note that Highmark is already the largest insurer in those three states, that Highmark is already cashing in as the primary Medicare processing agent in those three states, and that Highmark also owns (in total or in part by way of what it euphemistically characterizes as investment rather than ownership) several dental and optical insurance companies, the nation's second largest optical chain, its own chain of hospitals, and the burgeoning MedExpress empire of walk-in medical centers.

Something tells me that we somehow see another large "incidental" Highmark profit next year, huh?

Oh, and did I mention that PA, WV and DE may well be among the states in which the opening of these wonderful new exchanges will see premiums for everyone rise sharply?

And ... thanks to some of the neat fine print in the Affordable Care Act [that we had to pass to find out about] ... I'll explain to you tomorrow how Highmark and all its new thralls will get to play the insurance giant's favorite game.

It's called, We'll take your premiums, but good luck getting us to pay your claims--especially you folks with cancer.

Stay tuned.