Highmark dominates in Healthcare.gov enrollments

UPMC Health Plan signed up fewer than 1,000 insurance subscribers under the Affordable Care Act through the end of last month — offering the first glimpse of how Western Pennsylvania’s No. 2 health insurer has fared in four months of selling plans on Healthcare.gov.

Its chief rival, Highmark Inc., meanwhile, continued its dominance of the federal marketplace, saying that its four-month total topped 61,000 new members.

The information from Pittsburgh’s top two health insurers coincided with a report from U.S. Department of Health and Human Services that provided an enrollment breakdown for all the states and nationally as of Feb. 1.

More than 123,000 Pennsylvanians enrolled as of the beginning of February, up from 81,000 as of the end of December. The federal government said that total enrollment nationwide stood at 3.3 million.

While 1.1 million Americans nationwide signed up for coverage under the health reform law last month, extending a turnaround from early days when a dysfunctional website frustrated consumers, the pace of enrollments was down from December.

After technical problems prevented many people from shopping for insurance on Healthcare.gov in October and November, there was a surge in December as 1.8 million people enrolled for coverage under President Obama’s signature achievement.

Still, meeting the goal of 7 million sign ups by the end of March seems like a stretch because enrollment remains behind pace after a disastrous rollout of the online marketplace. The enrollment total represents 75 percent of what the Obama administration had originally hoped to have by the end of January.

The 18 to 34 age group made up about 25 percent of those who had signed up for health coverage through January, the report showed.

The administration has focused its outreach on young Americans, hoping to reduce the proportion of sick people enrolled in health exchange plans. Television ads featuring former basketball star Magic Johnson are airing during National Basketball Association games, and celebrities including Maroon 5 singer Adam Levine have been recruited to promote the law.

“These encouraging trends show that more Americans are enrolling every day, and finding quality, affordable coverage in the marketplace,” Health and Human Services Secretary Kathleen Sebelius said in a statement.

In Western Pennsylvania, the only other carrier selling plans on Healthcare.gov, Aetna Inc., did not release enrollment numbers.

UPMC spokesman Paul Wood blamed Highmark’s “low-ball” pricing and said it was likely the state’s largest health insurer would lose money on its exchange products, which are among the lowest-cost plans in the nation.

Highmark’s lowest priced silver-level plan, a Community Blue product that excludes most UPMC hospitals and doctors, costs a 27-year-old $133 a month. UPMC Health Plan’s lowest priced silver plan costs a 27-year-old $236, or 77 percent more the comparable Community Blue plan.

“We created a very actuarially sound and fiscally responsible product … Highmark did not,” Wood said, noting that UPMC’s plans are priced below the national average.

Highmark said 76 percent of the plans it has sold on Healthcare.gov were Community Blue plans. The remainder are broad-network plans that offer in-network access to UPMC.

Spokeswoman Kristin Ash disputed Wood’s contention that Highmark’s plans were priced artificially low. Highmark’s many years of experience selling health insurance to individuals in Western Pennsylvania allowed the company to price its plans competitively, Ash said.

“You can tell from the enrollment that we have that individuals are very interested in competitively priced products,” she said.

James McTiernan, a health care consultant with Downtown benefits firm Triad Gallagher, said price is the most critical factor affecting buying decisions on Healthcare.gov, where about three-quarters of shoppers qualify for tax credits based on their low incomes.

“If Highmark had the lowest price you would expect them to do very well in enrollment,” McTiernan said.

And while its not uncommon for insurers to cut rates to gain business, McTiernan said it’s unlikely that was Highmark’s strategy with its exchange business. No company had experience selling on the federal exchanges and therefore were only guessing about where to set premiums. “All these firms, they were setting a price for a risk structure that they had no idea what it would be,” he said. “This is their first time in, so you’re taking an educated guess.”

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