🔒A Lewiston health insurer uses its startup status to its advantage

Maine Community Health Options is not your ordinary health insurer. The Lewiston-based, member-owned cooperative was started with funding available through the Affordable Care Act, and is the first non-profit health insurer based in Maine since Anthem Blue Cross bought the assets of Maine Blue Cross Blue Shield in 2000.

Its market performance has been impressive in the early going. Competing with Anthem Blue Cross in the newly formed state health insurance exchange, MCHO ended up writing 80% of the policies in its first year, against 20% for Anthem.

For CEO Kevin Lewis, the success in sales, while gratifying, is not the main point. MCHO is trying to deliberately rewrite the traditional health insurer model, based on risk avoidance, and engage more directly with members and health providers about their needs.

Later this year, MCHO will cross another boundary when members are elected to the governing board, effectively becoming member-owned. Lewis acknowledges that co-ops have not always flourished in Maine — even in areas, such as agriculture, where cooperatives often dominate.

“For most Mainers, health insurance is about a lot more than the insurance product. It's really more about health, and a sense of security and well-being,” Lewis says in an interview at MCHO's new offices in Storehouse No. 2 of the old Bates Mill complex, where it has two floors comprising 20,000 square feet.

The new approach may be working. MCHO projections called for signing up 18,000 members via the exchange, and enrolling 22,500, including direct applications outside the exchange. Its actual totals came to 37,500, including direct signups, after subtracting those who signed up but did not pay premiums.

Lewis is quick to add that the totals are still a relatively small proportion of health insurance policies written in Maine. But the exchange is designed as a long-term proposition, as individuals and small businesses sort out their options. Under the ACA, businesses with fewer than 50 full-time equivalent employees are not required to offer insurance.

Over the next two years, nearly 100,000 more Mainers are expected to buy insurance via the exchange, which will then represent a significant proportion of the total marketplace, Lewis says.

The unexpectedly rapid growth has also led to a surge in hiring. MCHO now has 83 employees, and expects to hire more as it continues to meet demand. Revenues were projected at $103 million for 2014, but will instead reach $175 million.

While some MCHO employees came directly from other insurance companies, many — including Lewis — came from the primary care field, which has been seen as a vital link not only in improving the quality of care but also in controlling costs. The scenario where someone with cancer gets his diagnosis during an emergency-room visit is, unfortunately, still common.

While many insurers now have care management teams to deal with complex — and expensive — cases, MCHO uses not only teams of RNs, but care-coordination efforts that include licensed social workers. “Unless the member understands and can follow the care being provided, the outcomes aren't going to be great,” says Maggie Kelley, a nurse practitioner and director of Care Management and Quality for MCHO. She has worked for many years in acute care and primary settings, and on-site for a commercial insurer.

One example where traditional insurance methods fall short is in dealing with isolated communities such as those in rural areas and on islands, she says. MCHO approves the use of biometric monitoring — telemedicine — in such settings as a cost-effective alternative for conditions such as congestive heart failure, chronic obstructive pulmonary disease and emphysema.

Keeping patients at home, with medications carefully regulated, can prevent numerous hospital admissions, which are especially problematic in remote areas, Kelley says.

Lewis provides an example of new thinking when it comes to tobacco smoking. Most insurers charge significantly higher rates for smokers, reflecting their higher mortality rates and propensity to need expensive treatment for cancer, heart disease and respiratory ailments.

MCHO charges smokers the same rates as non-smokers, and also makes sure that co-pays and coinsurance are not a barrier to smoking cessation treatment. “Most adults who smoke want to quit,” Lewis says. “We see it as in everyone's interest to help them do that.”

Over time, projections are that savings from hospital treatments will effectively pay the short-term costs of offering incentives to quit.

Lewis says he welcomes competition from other insurers. “We'll always be competitive on price while still offering meaningful coverage,” he says. “One of the reasons we got into this is to make a commitment to Maine people, to really work with whoever's calling to find the right solution.”

But he thinks this one will work.

He attributes MCHO's initial success to being “a local, non-profit business that's based in Maine and hires Maine people.” Still, he says, member ownership will provide long-term stability and a level of involvement unique in American health care. “It will always be a non-profit and can never be sold,” he says.

“We're long past the point of where we're concerned about financial viability,” Lewis says. “We're here to stay.”

That wasn't always the outlook. It has been suggested by some that many ACA co-ops will fail. And it has been difficult to establish them, even in regions such as northern New England.

The co-ops were included in the ACA after negotiators decided to use the state-based exchanges in the Senate bill rather than the national exchange provided for in the House version. It was recognized that small states might have difficulty attracting multiple insurers.

Vermont was approved for co-op funding, but it never got off the ground after the state insurance commissioner questioned its financial projections and denied a license.

New Hampshire sought funding in what was to have been the last round of approvals, in December 2012, but it was canceled after the 2011 federal budget cuts were succeeded by the budget sequester. Anthem is the sole insurer on the New Hampshire exchange.

So Maine is the only state in the region with a functioning insurance co-op, and that creates opportunity, Maggie Kelley says. “In an era of transformation of health care, Maine is really progressive. The beauty of being a startup is that it lets us think everything through, to make sure that our products meet people's needs.”

Lewis sees it as “aligning payment methods with health outcomes, and paying only for what works.” That sounds simple, but achieving it has bedeviled reformers on both the national and state level for decades.

The best way to do it, Lewis believes, is to listen carefully to providers and those they serve. Kelley, for instance, spent much of 2013 on the road, visiting providers all over the state.

“Insurers sometimes create barriers even without intending to,” Lewis says. “We want to make sure that the care we're approving is effective, and that it gets to the people who need it.”

When a bottleneck does occur, MCHO tries to find ways to remove it. Kelley says that the pre-approval process that's standard for insurers turned out to be unduly cumbersome for providers. It's since been streamlined.

Lewis is the first to admit that there were some tense moments last Oct. 1, when the ACA exchanges were starting up just as the federal government was shutting down — and the Health.gov website began crashing under the weight of initial inquiries.

“We were concerned,” Lewis says. “There weren't a lot of customers getting through.”

He and the staff decided to work on “whatever was in our realm to influence,” which at that point was to beef up its outreach and enrollment strategy, including insurance navigators — who worked largely by phone — and certified agents who met one-on-one with clients.

“It was important for everyone to keep at the work, and not get distracted,” he says.

After a lull for the Thanksgiving holiday, Lewis says, “the phones started to light up.” And it's been busy ever since.

He says that “a realization of our newness in the market” might have attracted callers and website users initially, but without “an effective pricing and value proposition” sales wouldn't have come through.

His concern after January was whether signup trends would be “parabolic or linear” — whether they'd drop off after the strong start — but they continued to rise throughout the open enrollment period.

On the sensitive subject of Medicaid expansion, which the Legislature approved five times and Gov. Paul LePage vetoed on each occasion, Lewis is forthright.

“We support expansion because the best studies at the National Institutes of Health show that coverage improves health,” he says. “There's great value, and not only monetary value, in making sure that everyone is covered.”

Lewis recalls his experience as a young aide to Wisconsin Gov. Tommy Thompson, later DHHS Secretary under President George W. Bush, who was considering whether to join the State Children's Health Insurance Program (SCHIP) that President Bill Clinton had proposed and Congress enacted.

Thompson, a Republican, had to convince reluctant members of his own party that expanding eligibility had benefits, but ultimately he did, Lewis says.

Part of the reason for offering Medicaid to those near the poverty level, “is to make sure they're work-ready,” Lewis says.

Lewis says “the jury is still out” on whether most small businesses will continue to offer their employees insurance even though they're not required to.

What's beginning to emerge, though, is that companies with primarily low-wage employees will likely find better deals on the exchange, with its generous subsidies for individuals. Firms with higher-paid employees may well decide it works better to offer a company policy even for a few individuals.

“We've learned too much about to make health care work better to ever go back,” he says. “This is an exciting time to be in our field.”

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