Interview with Jared Short, President of Regence (part 1)

Jared ShortJared Short is the President of Regence Insurance Holding Corporation. This post is part 1 of a 2 part interview.  The second part will be posted Friday.

DJ:  Jared, thanks for making time to talk with us about exchanges in Oregon and Washington.

My pleasure.  Thanks for giving me the opportunity, DJ.

DJ: First, how does Regence view the exchange marketplace compared to the non-exchange marketplace for fully insured products?  Are there different strategic approaches or considerations between the two?

We have long supported the development of exchanges in both Oregon and Washington because we recognize and support the consumer-friendly shopping experience they can provide.  Right now, the clear demand from consumers is in the Individual exchange market. So, we are focusing our efforts there by creating a new company called BridgeSpan, designed from the ground up, to respond specifically to the needs of individual shoppers.

DJ: It appears there will be eight plans in the Oregon SHOP.  What was the rationale for Regence to not participate in the SHOP (small group exchange) in Oregon?

We’ve supported the creation and development of exchanges since day one, and we continue to do so.  Right now our exchange focus is on the individual market. Individual consumers want to buy through the exchange, but we don’t see the same demand from small businesses at this point in time. Take Oregon for example. Regence BlueCross BlueShield is the largest small business carrier in the state and we’ve added more than 1,400 new members so far this year. We’re offering flexible plans and products that small business owners need, and we’re showing growth into 2014.

DJ: But what about this notion that of “If you build it, they will come?”  Isn’t that what good marketing is for – to help create consumer demand where there wasn’t any before?

Small business owners are smart people who put the needs of their employees and their companies above marketing campaigns. They realize that offering employer-sponsored benefits helps attract and retain top-tier talent to help grow their businesses. Based on our conversations with our small group customers, we believe that, at this time, we are best able to meet their needs off the exchange by offering them plans very similar to what they already have. We will continue to talk to them to re-evaluate their needs and desires to purchase products on the SHOP exchange, and respond accordingly in the future.

DJ: Was there a different rationale for the Washington marketplace?  It looks as if there may not be any participants in the Washington State SHOP, save perhaps Kaiser in Clark County.  I would think that in Washington State, with a larger market and without any competition, the demand-related concern would be mitigated.

The Washington small group market is larger in comparison to Oregon, but size outside the exchange does not guarantee participation within. The Health Benefit Exchange is predicting only two percent of its total enrollment through the SHOP exchange in its first year. It’s clear that demand, right now, remains highest in the traditional market and so we’ll continue to serve our small business customers outside of the exchange.

DJ: How much of this demand-related concern could have been mitigated by different approaches from the exchanges themselves?  I mean, was this market challenge on the demand side, from your view, was it built in to the Affordable Care Act?  Or did decisions made by the exchanges influence your thinking here?

These are unprecedented times of change and so employers are being careful to make the best possible decisions for their businesses and their employees. It’s important to remember that for months many thought this law would be overturned, several different times. Employers were forced to wait and see as the politics played out. Now it’s the law of the land and companies are taking their time to evaluate their options. The exchanges in Oregon and Washington have done a remarkable job; we’ll watch closely, listen carefully to our small business customers, and respond to the needs of the market.

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Part 2 will be posted on Friday.