Daniel Hilferty harbors more than a few worries as head of the lone insurer on the Affordable Care Act’s insurance exchange in Philadelphia.
The Independence Health Group CEO frets about whether his plans can attract enough healthy people to balance the claims the insurer pays for the sick. Hilferty also is concerned about whether government cost-sharing reduction payments that help defray expenses for many exchange customers will return.
Independence provides Blue Cross coverage through the exchange to about 140,000 people in southeastern Pennsylvania. Despite concerns, Independence is one of many insurers around the country that have made tentative plans to return next year to the exchanges, the only marketplace where people can get income-based tax credits to buy coverage.
Insurers still have several more weeks to finalize their plans. They could still back out, depending in part on how the Congressional debate over the Obama-era health care law unfolds.
Hilferty spoke recently with The Associated Press. Questions and answers have been edited for clarity and length.
Q: Does the fact that you are the only insurer left on the exchange affect your decision to return?
A: We are very serious about serving the community as a whole, and that includes the individual marketplace even though it’s a small percentage of our overall business. The fact that we are the last plan standing would play a significant role in our ultimate decision.
Q: Insurers have been hit with significant losses in this market. Why are so many making preliminary plans to come back next year?
A: There are a number of plans … that have long-term, deep roots in the community that they serve. They would welcome a program, whether it be an improved ACA or a replacement, that is sustainable. They’re hedging their bets to make sure that everyone is aware that if the program is feasible, it would be attractive.
Q: You offer a catastrophic health plan for people under age 30 that comes with a $7,150 annual deductible for single coverage. Why would somebody buy insurance that doesn’t cover much until the patient first spends more than $7,000?
A: We just want to make sure for that whatever the small percentage of folks that have a potential catastrophic illness or multiple disease states that we had a product in place that they would have at least that security. But certainly I cannot argue your point, and we’ve heard it from a number of people, when you’ve got a deductible at that level, it’s not frankly a very attractive plan.
Q: What kind of security would this type of coverage provide?
A: There are a number of very costly significant disease states that if you look at it over time, you more than eclipse the deductible and still have the benefit of pharmacy coverage, other procedures and services. Just think of somebody, for example, who has hemophilia and the high cost of injectables. That’s the type of person that might fall into that category.
Q: Are the exchanges sustainable in their present state beyond 2018?
A: I would say that the exchanges, absent the (cost-sharing reduction payments), absent either a mandate or an attractive tax incentive program … are not sustainable.
Q: What’s your recipe for attracting younger customers to the exchanges?
A: Well, if there’s a requirement around consistent coverage, we think that will keep them in. In terms of attracting them, it’s very important that, A , we are able to reach a price point that’s attractive, B, that we convince them that there is an opportunity to manage and maintain better health. That’s something that we continue to work on aggressively regardless of what government ultimately decides to do.