Provider-Owned Carrier in Exchange

[RayNY]

So, just wanted to hear your input on this one, because it's a bit disconcerting.

North Shore LIJ is MAJOR chain of hospitals in Metro NY/Long Island, has a near monopoly to be honest.

They now, as of today, have been approved to be their own health insurance carrier. The first provider-owned carrier I know of, and certainly the first in the state.

New York State Licenses North Shore-LIJ Insurance Company Inc. as Health Insurer <Press release

Is this common outside of our little NY bubble? Does anyone else see a conflict of interest with the provider also being the insurer?

FYI, their rates (as per the newest released rates) don't look that competitive considering their relatively small network. Many carriers that offer all of their hospitals, plus others, and have been around for years with existing blocks, have significantly lower rates.

 

[ABC]

No, this is not a new thing.

I have done business with broker friendly hospital network plans.

Currently I am faced with one that is not broker friendly that will be participating in my states exchange. I pray they are over priced.

 

[STIBROKER]

Back in the day Seton in Austin put out a individual plan to the public that covered maturity with a $300 copay and no Rx coverage....they lasted about a year......

 

[russelltw]

We have a small regional one in NC that will operate in the exchange. I can not imagine a hospital trying to get up to speed on designing/marketing/pricing insurance policies to compete with the big carriers with years of experience. Will be interesting to see how they hold up.

 

[leevena]

Ray, this is nothing new and is actually older than you may know. The first few plans there developed were provider owned (Baylor, the forerunner of the blues, and Kaiser) and there are still some left in the country. The issue for these models were always centered around how they managed the risk, which usually was poorly and ultimately led to their demise. But there are still millions of members covered by well run provider owned plans.

 

[Ann H]

Humana started out as a hospital company that ventured into insurance. So, clearly some of these ventures survive, although they rarely keep the identity of both a hospital and an insurer. Usually they either go back to being a hospital or go forward to being an insurer.

Years ago, Mayo Clinic developed their own health care plan, and since Scottsdale AZ has a Mayo here it was big news. It fizzled and was over within a year or two.

Clinics and groups of doctors tried to become their own insurers at times, but almost all realized (painfully) that they may know a lot about health care, but the public funding mechanism is quite another story.

 

[RayNY]

Well thanks for the quick education everyone. I've seen doctor-group based insurers (Atlantis/EasyChoice is the one in NY right now), but in my admittedly small time in the insurance market, this is the first provider-based one I've ever seen.

They recruited some notable people from existing carriers, and raised near $200MM to get off the ground. They're the biggest single network in the state as far as I know, and have been advertising like you wouldn't believe for over a year. They're certainly capable of succeeding.

It appears they will be broker friendly, they're the only carrier so far to state broker commissions officially in a press release (even if it is 2%...).

It will be interesting to see what happens in the new marketplace between them, the other big names that utilize their hospitals in larger networks with lower premiums, and the smaller players like Oscar and Freelancers that are trying to claim their own place in the market.

 

[bluediamond]

Ray, this is nothing new and is actually older than you may know. The first few plans there developed were provider owned (Baylor, the forerunner of the blues, and Kaiser) and there are still some left in the country. The issue for these models were always centered around how they managed the risk, which usually was poorly and ultimately led to their demise. But there are still millions of members covered by well run provider owned plans.

Wasn't HCA in some part's into this many year's ago?