February 28, 2014

Insurance newcomer making an impact in SC

The nonprofit co-op isn’t releasing policy numbers, but Consumers’ Choice says it has sold more than 50 percent of the plans purchased in South Carolina.

With a month to go in the first year of the federal Health Insurance Marketplace, it appears Consumers’ Choice Health Plan, a newcomer to South Carolina, has made an immediate impact.

The nonprofit co-op isn’t releasing policy numbers, but Consumers’ Choice says it has sold more than 50 percent of the plans purchased in South Carolina.

When South Carolinians go on the Health Insurance Marketplace, they have choices of policies from four organizations. There are well-known entities – two from the BlueCross BlueShield family and one from Coventry, which was acquired by insurance giant Aetna last year. And then there’s Consumers’ Choice, which was created last year specifically for the marketplace.

State and federal government statistics – which combine sales from all four groups – indicate 47,641 people in South Carolina had signed up for and selected policies on the marketplace by Feb. 1. Only 30,076, or 63 percent, had actually paid the first premium, which state officials point to as the more important number.

Consumers’ Choice says the percentage of its policies that have been paid for is much higher than 63 percent. The co-op estimates it will have sold more than 25,000 policies by the end of March.

“Our price point has a lot to do with it,” said Adrian Grimes, spokeswoman for Consumers’ Choice.

The co-op offers two of the three cheapest monthly premiums available in South Carolina at each of the three levels of coverage – bronze, silver and gold. Insurance experts say premium cost is only one factor insurance shoppers should consider, and that deductibles, co-pays and physician networks can be just as important. One way companies reduce premiums is to offer fewer physicians in their provider networks or higher co-pays and deductibles.

BlueCross BlueShield of S.C. and Blue Choice Health Plan offer more plans than Consumers’ Choice at each level of coverage, allowing buyers to cater to more specific needs. But in nearly every case, the premiums are higher for plans from the Blues.

Consumers’ Choice apparently is performing better than many of the other 22 nonprofit co-ops created by the Affordable Care Act.

John Morrison, who recently stepped down as the founding president of the National Alliance of State Health Co-ops, told Kaiser Health News recently that the newcomers have attracted between 15 and 20 percent of the total marketplace policies in the 23 states where they operate. That’s based on about 300,000 people signing up through co-ops nationally since Oct. 1, according to Morrison.

The co-ops were created by the federal government to provide more options for insurance shoppers on the marketplace. They received federal loans and will be operated by their members. They were expected to be the less-expensive option in most of the states where they operate.

“We’ve met all of the goals,” Grimes said.

Price seems to be the key to the co-ops making an impact. The New York Times reported Wednesday that HealthCT, a co-op in Connecticut, has sold 1,700 policies, or about 3 percent of the policies sold in that state. The main reason is simple, the co-op’s premiums generally are more expensive than those offered by more established companies.

“If you look from state to state, you will see where co-ops are priced competitively, they are doing very well,” Morrison told the Times.

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