OR: Insurers Say Moda’s Dominance Won’t Deter Them from Exchange in 2015


Cover Oregon’s announcement earlier this month that Moda Health had picked up 73 percent of qualified health plan (QHP) enrollments has caused some eyebrow-raising.

“Seventy-three percent market share by any standard is very high,” said Peter Graven, a health economist at Oregon Health & Sciences University’s Center for Health Systems Effectiveness.

Given that 11 carriers are offering plans through the exchange, it would have been reasonable to expect enrollment to be spread more broadly.

But the drop-off after Moda has been steep:  Kaiser accounted for just 9.4 percent of total enrollment by March 6.  Providence was third, with 5.1 percent.  The other eight carriers each had three percent or less, and three of them each had one percent or less.

Moda’s early dominance of Oregon’s exchange market may be daunting, but other carriers say their own low enrollment numbers will not deter them from offering exchange plans in 2015.

Trillium Community Health Plan, which offered a commercial plan for the first time this year, had attracted only one enrollee through the exchange by early March.

Nevertheless, Trillium intends to offer plans through Cover Oregon in 2015, according to spokesperson Debi Farr.

LifeWise Health Plan of Oregon also intends to be on the exchange again in 2015, according to Eric Earling, its director of corporate communications.

LifeWise Health Plan of Washington and its parent company Premera Blue Cross, based in Mountlake Terrace, Wash., have dominated Washington’s state-based exchange, attracting nearly two-thirds of enrollees.  But in Oregon, LifeWise has picked up only three percent of the exchange market.

Nevertheless, LifeWise is confident its enrollment in Oregon will increase once Cover Oregon’s website becomes fully functional and more consumer-friendly, Earling said.  He added that ongoing technical problems at Oregon’s exchange have meant that “everyone’s enrollment estimates within Cover Oregon [were] out the window.”

Prospects for carriers like Trillium and LifeWise may, indeed, be better the second time around.

Graven said Oregon’s rate review process and the Affordable Care Act’s regulations—including prohibiting insurers from increasing premiums and lowering claims costs—will prevent carriers with market shares like Moda’s from monopolizing the marketplaces and using that as leverage to increase rates.

“Ordinarily, we would be more concerned about a market share like [Moda’s],” Graven said. “But given the various constraints through rate review and the Affordable Care Act’s regulations, it’s less concerning.”

The primary reason Moda dominates the exchange right now is price: its plans have the lowest premiums among all the plans offered through Cover Oregon.  For a 28-year-old nonsmoker living in the Portland metro area, monthly premiums range from $141 to $152 for its bronze plans, and $165 to $212 for its silver plans.

“You could tell pretty early on that they were going to do well,” Graven said.

In general, carriers faced a lot of unknown variables when they set their 2014 rates and may have priced their plans higher than was necessary, according to Graven.  Revised enrollment projections, more knowledge about enrollee demographics and other actuarial data may enable carriers to offer more competitive rates.

Ellen Meara, a health economist at The Dartmouth Institute for Health Policy & Clinical Practice, agreed:  “Even that threat of entry into the market, or losing that market power, can lead plans to offer better products.”

When carriers set their 2014 rates, they had no knowledge of what Cover Oregon’s risk pool would be like, which is an important factor used to set rates.  That information could be used for rate setting this year—a process that will begin in the coming months—to lower rates to be more competitive with Moda.

“There were lots of unknowns for all carriers participating in the individual market,” said Colleen Thompson, a spokeperson for PacificSource, which picked up just three percent of enrollment through Cover Oregon.

In 2015, “[t]here’s a clear opportunity to…better align our plan offerings with consumers’ needs,” Thompson told State of Reform via email.