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June 23, 2017

Part 5: How one ACA insurer is navigating the turbulent health insurance marketplace

Photo / James McCarthy Community Health Options, a Consumer Operated and Oriented Plan nonprofit insurer based in Lewiston, has 160 employees and five people in Fort Kent who are under contract.

A Business Insider analysis of the “Better Care Reconciliation Act of 2017” — the Senate Republican plan to repeal and replace Obamacare that was released on Thursday — reported that the legislation is getting pushback from conservative members who say it doesn’t go far enough and from moderates who’ve raised concerns about deep Medicaid cuts and the scaling back of funding for tax credits that help middle-income earners buy their own health insurance. 

U.S. Sen. Angus King, I-Maine, offered his own pushback, describing it as a “really cruel bill.”

“It basically increases the cost of health care, particularly for seniors; massively cuts Medicaid, which supports people in nursing homes, disabled people, children,” he said in a Facebook video posted Thursday. “And it’s going to have a devastating effect economically on Maine, on our hospitals, and on our rural health care system — and all of this in the name of a huge tax cut for the wealthiest Americans.”

A more tempered view was offered by U.S. Sen. Susan Collins, R-Maine, who appeared on MSNBC’s Meet the Press Daily in an interview with host Chuck Todd and contrasted the Better Care bill with her own co-sponsored legislation with Sen. Bill Cassidy, R-Louisiana, introduced in January.

“I still believe that the bill that Bill Cassidy and I introduced was a better path forward and ultimately would have attracted bipartisan support, and that’s what we really need when we’re tackling an issue as difficult as health care is,” she said, referring to the Patient Freedom Act of 2017.

Like King, Collins said she would be closely reviewing the Congressional Budget Office analysis of the Better Care act, but voiced concern about the “impact of Medicaid changes” and “what the impact will be on people who are very vulnerable and have health care needs.”

At the conclusion of her interview, Collins essentially drew her line in the sand, contingent on the CBO’s analysis of the bill.

“I can’t support a bill that’s going to greatly increase premiums for older Americans or out-of-pocket costs for those who aren’t quite hold enough for Medicare yet,” she told Todd. “I cannot support a bill that’s going to result in tens of millions of people losing their health insurance. And I cannot support a bill that is going to make such deep cuts in Medicaid that it’s going to shop billions of dollars to our state governments, to those who have insurance, and to health care providers such as rural hospitals, which would be faced with a great deal of uncompensated care. So, it isn’t any one factor. I do care also about funding Planned Parenthood.”

Senate Majority Leader Mitch McConnell, R-Kentucky, is pushing for a vote by the end of next week, before the weeklong July 4 recess.

In this, the fifth and final installment of our five-day series “How one ACA insurer is navigating the turbulent health insurance marketplace,” Community Health Options CEO Kevin Lewis looks beyond the current political turmoil over repealing and replacing Obamacare and asserts that his company is in it for the long haul.

The following is from an edited transcript.

MB: Obviously, political uncertainty about the future of the ACA is one element you’re having to deal with in 2017. What else is ahead for Community Health Options in 2017? Are you out of the woods financially?

Kevin Lewis: We’re in positive territory now having completed the first quarter of 2017 in the black. Undoubtedly, we’ve got many miles to go as an upstart nonprofit regional health plan with large aspirations. We’ll always have room for improvement, but we have put into place better tools, greater efficiencies and better mechanisms for supporting a top-notch service model.

Some of the behind-the-scenes kind of boring details that aren’t going to capture any headlines are some of what we’re most proud of, in terms of ensuring that the information we have to work with and how we are able to support our members is solid. It’s not really exciting stuff, but for us it’s vitally important.

MB: And what is the membership at this moment?

KL: We’re about 42,000.

MB: That’s down from a high of roughly 80,000?

KL: We had roughly 80,000 back in January 2016.

MB: Are you completely out of New Hampshire as we speak today?

KL: We have some small group members still in New Hampshire. We approached the need to withdraw from New Hampshire thoughtfully and have wanted to exit New Hampshire in the very best manner possible, which was to do so not abruptly. Rather, we have committed to seeing through all of our contracts to the point of renewal and so we have a balance of those members in New Hampshire that we’re maintaining until their renewal dates.

MB: And then you’ll be out of New Hampshire?

KL: Yes, until some point in the future and then we’ll revisit it.

MB: You’re not closing the door, then?

KL: No. Never close the door.

MB: Regardless of what might happen on the political front, is CHO here to stay?

KL: Yes, absolutely. I think there’s always a need for Maine’s own nonprofit insurance company, that was founded here and is committed to Maine’s market.

MB: Do you think the public understands that? Since you were created under the ACA, it seems there might be an assumption that if the ACA disappears your company might disappear as well?

KL: Well, there lies an important distinction, because our genesis goes back a bit further than that. While we were financed by the ACA, we were created separately from the ACA and incorporated under Maine law. After our founding, we applied for CO-OP status and financing through a competitive vetting process, and we were successful in securing that designation.

MB: You have financial obligations resulting from the creation of this company. How do political decisions regarding the ACA affect those obligations, if at all?

KL: A shrinking individual market would make it much more difficult for us. That being said, we are committed to repaying our loan, and making good on that promise.

MB: What is the amount of the loan you’ll need to repay?

KL: It’s about $132 million. Just under $12 million is in start-up loans. There are two terms. There’s a five-year term for the start-up loan and the solvency loan is over 15 years.

MB: Are you on track to fulfill those obligations?

KL: Certainly. Our pro formas demonstrate repayment of all of that obligation back within the 15 years that’s allowed by that loan.

MB: And the employment level now stands at?

KL: We’re at 160 employees and five people in Fort Kent who are under contract.

MB: With all the uncertainties, how do you cope? Meaning: both yourself, and your employees.

KL: I keep hopeful because of the hard work of everyone around here. It’s impressive what we’ve accomplished and it’s also inspiring to come to work everyday in a mission-driven organization and our consistent zeal to deliver on our mission. Our resolute nature, that spirit of a can-do attitude, is itself fuel for the effort.

But it’s also getting back to the question: If not us, then who?

That’s where our optimism comes into play. We see tremendous good in this state and the business community and the entire community of Maine. And we firmly believe that we can and should get the job done, and achieve better health outcomes and reduce the total cost of care.

MB: Anything else you’d like to add?

KL: Well, we continue to push forward on improvements that will help our members and provide better tools to inform consumer engagement. Despite our impatience, we maintain our long view. And so, while it’s taken longer to arrive at solutions we envisioned at inception, we are gaining ground and seeing positive results come from the effort. For instance, we have just rolled out the Rx Savings Solution benefit for members which gives consumers visibility into lowering out of pocket pharmacy expenses. Key enhancements to consumer and provider portals are being rolled out this month and new products are being constructed for offering in 2018.

Read more

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