While many Blues plans have suffered substantial financial losses on the public insurance exchanges, Horizon Blue Cross Blue Shield of New Jersey is touting record enrollment in the individual market. Between 2013 and 2016 membership in that segment ballooned from 120,000 enrollees to more than 220,000.
HHS invited Horizon to highlight its experiences with HealthCare.gov during a full-day forum on June 9. The meeting helped to illustrate that insurance companies can be successful on the exchanges, says Michael Considine, vice president of consumer and small-group markets at Horizon. Considine and Ed Lara, vice president of marketing and product development, were part of a panel that highlighted exchange successes. SelectHealth, a regional carrier in Utah, was also on the panel.
Land-Grab Hurt Some Carriers
Horizon’s conservative leadership when the exchanges opened in 2013 combined with highly targeted outreach efforts and an early decision not to rely on the Affordable Care Act’s risk-mitigation program — helped the company minimize risk and reach communities with high uninsured populations. Outreach efforts that targeted Spanish-speaking communities helped the company boost enrollment among the Hispanic population by nearly 400%. Hispanic consumers represent 15% of the state’s 41,000 previously uninsured residents who enrolled in OMNIA Health Plan for 2016. The OMNIA Health Alliance, which includes Horizon, six health systems and one medical group, launched last year and is an advanced form of tiered products, according to Horizon.
The AIS Report spoke with Lara and Considine about their presentation and Horizon’s past and current strategies for thriving on the public insurance exchange. Here’s what they said:
The AIS Report: What did your presentation highlight, and what do you hope other health plans took home with them?
Lara: We tried to compare and contrast our approach with the approach that we sensed over the last several years that the other companies have been taking. One of the clear directions from management when we started preparing for the ACA was that there were going to be many unknowns. We had the, but would have to withdraw all of these fairly popular products and replace them with ACA-compliant products that were going to be far more expensive. Our goal was to maintain our 120,000 existing members. The secondary goal was to just get our fair share of the uninsured coming into the market. There was no doubt our share of the market was going to decrease because we had more competitors.
The AIS Report: What was your strategy?
Lara: Our mantra was “no land-grabbing.” We got a sense that other Blues plans and competitors were looking at [the exchanges] as a way to grow their business dramatically. I can’t tell you how many consultants and other groups advocated that plans go very aggressively after the high-risk people because they were going to be paid back through the 3Rs [reinsurance, risk corridors and risk adjustment programs]. We didn’t build our financial models on the 3Rs. Being very conservative by nature, our management team decided to build the plans and price according to a healthy book that we can sustain. And if we didn’t get as many members in the first year, that’s OK because we have to build a sustainable business.
The AIS Report: If the 3Rs had worked out as promised, that would have been icing on the cake?
Lara: That’s exactly right.
The AIS Report: What was your outreach strategy initially, and what is it looking ahead to the upcoming open-enrollment period?
Lara: Our entire campaign was segmentation specific. We embarked on an advertising and messaging campaign that was specific to the various segments that made up the individual market. The message we put out for a young invincible, for example, wasn’t the same message for someone who was 60 years old. We’ve changed our tactics each year based on what we learned from each open-enrollment period. About 40% of the uninsured population in New Jersey is Hispanic. Prior to the ACA, we had 8,000 Latino and Hispanic members. We now have more than 30,000. We did a lot of cultural adaptation, changed marketing materials and actually went into urban Jersey City and opened a retail center in the heart of the Hispanic community. Many people were considering insurance for the first time.
The AIS Report: What are you doing differently for the upcoming enrollment period?
Lara: After open enrollment, you have a high water mark in terms of your membership. Then you have attrition throughout the year. Each and every month, you have to show the value of paying the premium. Why is it important to stay insured? For 2017, we are focusing very heavily on retention. We have to prove our value every single month. And that’s different from an annual retention campaign for group insurance. If don’t see the value of what they bought, they will opt out.
The AIS Report: That’s a huge issue. If I’m healthy and in my 20s, I need to see some value from the money I’m spending on premiums each month. What do you offer outside of the deductible?
Lara: Our research indicated that people are most interested in affordability and simplicity. We launched with five products in the first year [of the exchange]. Some competitors launched with 50. The key to affordability has been our tiered products. They offer lower-out-of-pocket costs with the tier-one facilities. We also emphasized all the other benefits such as free preventive screenings under the ACA, but we also have benefits that you can only get from us. Blue 365 gives members significant discounts for sneakers, gym memberships and nutritional. We did some research recently and realized there are a number of things we take for granted that our customers value highly, such as telemedicine. We are bumping up that area. For young people, convenience is the top thing. If they can do a consult through their smartphone, that’s a big deal for them.
The AIS Report: Did you see many small groups move members over to the individual market?
Lara: We did, but not as many as we originally thought. The small-group market has shrunk dramatically over the past six or seven years, but we didn’t see massive migration to the individual market. Employers must still compete for employees, especially as the unemployment rate has come down.
The AIS Report: A lot of carriers have complained about CMS’s lax enforcement of Special Enrollment Periods. Have the SEPs had a negative impact on Horizon?
Lara: I’ve heard many companies say they have been adversely selected against during the SEPs. We have always had a tight process around that from the beginning. We did a lot of validation to make sure that really did have a [qualifying life event]. Other companies had been relatively lax in the enforcement and validation, and we from day one were very concerned about that and we put in several safeguards from a process perspective. That has not been an issue for us as it has been nationally. We needed to see the documentation, and if that wasn’t provided, we weren’t signing people up; it was as simple as that. And they went to our competitors. And that impacted our competitors dramatically.
Date: July 01, 2016