Indiana University Health will be selling insurance plans on the Obamacare exchange late this year—but not in the Indianapolis area.
IU Health Plans, the insurance arm of the Indianapolis-based hospital system, is limiting itself to three middle-size markets next year—Bloomington, Lafayette and Muncie—even though the bulk of its facilities is in the metro area.
That will, of course, keep IU Health Plans’ enrollment small next year—it predicts about 2,000. But the hospital system says it wants to make sure it can handle this new foray into the individual insurance market before it ramps up in Indiana’s largest city.
“If we were in Indianapolis next year, that would come with more unpredictability or more execution risk,” said Jim Parker, CEO of IU Health Plans.
That’s insurance talk for pricing policies incorrectly or getting more customers than IU Health is set up to serve, both for general customer service questions and in processing medical claims.
Parker noted that setting prices in the Obamacare exchanges is more difficult, at least right now, than in other parts of the insurance market that have been around for longer. It is hard to predict how many customers will sign up, since the numbers will hinge on how many employers keep offering health benefits, whether Indiana expands its Healthy Indiana Plan to Hoosiers with incomes up to 138 percent of the federal poverty limit, and how many of the uninsured with higher incomes choose instead to pay Obamacare’s tax for going without insurance.
Also, since insurance plans can’t ask about patients' health status in advance, it’s hard to know how much medical care they will need.
“Forecasting future years’ membership is probably more challenging [in the Obamacare exchange] than it is in the traditional markets,” said Parker, who also oversees IU Health Plans’ insurance plans for employers and its Medicare Advantage plan for seniors.
IU Health Plans is taking a more complicated approach to try to keep its insurance costs down. Rather than negotiate the lowest per-unit price on services, IU Health Plans hopes to keep patients healthier and needing fewer services by helping the doctors, nurses and health facilities in its provider network work better together.
The concept is known in health insurance circles as population health management.
“Our focus next year will be not so much centered on creating a huge membership number as in making sure that we understand those success factors for this business as well as we can,” Parker said. “And that we’ve got the right processes and execution levers in place to do it well.”
If it’s successful in Bloomington, Lafayette and Muncie, Parker suggested, IU Health Plans will be on the exchange markets for 2016 in Indianapolis and its surrounding counties.
“We’d almost certainly be considering Marion County and central Indiana,” he said. “That’s really the core of our footprint.”
Indeed, IU Health operates three massive hospitals in downtown Indianapolis, as well as hospitals in the nearby suburbs of Avon, Carmel, Fishers and Martinsville.
Long term, Parker said, IU Health wants to sell insurance even beyond the territories in which it has hospital campuses and employed physicians. IU Health is working with outside groups, such as the large physician practice American Health Network, to reach territories where IU Health has no presence. Also, IU Health is contracting with outside health care providers to fill in certain medical specialties it does not cover adequately, at least in all its territories, to serve insurance customers.
There will be eight other health insurance plans sold on the Obamacare exchange in Indiana for 2015. IU Health has a financial stake in two of them–Indianapolis-based MDwise Inc. and SIHO Insurance Services Inc.
The others include Anthem Blue Cross and Blue Shield, Coordinated Care, Physicians Health Plan of Northern Indiana, CareSource, and UnitedHealthcare, which will sell under its AllSavers brand name.