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Insurance giant enters local mix in health care

The biggest nonprofit health insurer in metropolitan New York City is throwing its hat into the competitive ring in Western New York, unveiling a new suite of products for the region and launching a massive advertising campaign starting today.
EmblemHealth, the giant insurer formed by the 2007 merger of Group Health and HIP Health Plan of New York, is introducing a preferred provider organization plan, or PPO, and other products for Western New York to compete with the region's dominant carriers.
Company officials said the new products are priced to be competitive and are customized to the region, based on local input from consumers and insurance brokers. The provider network includes all area hospitals and many doctors.
"People are looking for value, and we feel that our proposition, which is a combination of price and service, will be very competitive in the marketplace," said Michael R. Giaquinto, vice president for upstate business.
This is the second big push into the commercial market for the company, which already offers dental insurance locally under the GHI brand. It's also the first stage in a more aggressive expansion across upstate New York, under Giaquinto, that will also focus on Rochester, Syracuse, Albany and the Hudson Valley.
"We have a successful business model that we've been operating downstate, and we want to bring it upstate," said Giaquinto, a former executive at Buffalo-based HealthNow New York, who joined in July 2011. "What's worked for us downstate will work for us here."
The company currently provides medical coverage in Western New York to 27 small employers with a total of 169 members and offers dental coverage to large employers, including schools and municipalities, with more than 53,000 members across upstate.
The company introduced its products to more than 90 brokers locally Sept. 7, and the brokers are now selling Emblem plans for annual contracts starting as early as November. The company will launch television, radio, print, online, billboard and direct-mail advertising starting today.
"We are encouraged by another health carrier in the market and plan on quoting EmblemHealth plans as an option," said Lisa M. Lyman, director of sales and customer relations for Veracity Benefits.
EmblemHealth is entering a market dominated by HealthNow, Independent Health Association of Amherst and Univera Healthcare of Amherst, which is part of Rochester-based Excellus Health Plan.
"EmblemHealth has held a very small share of the Western New York market for at least five years, and we will continue to watch their efforts," said IHA spokesman Frank J. Sava. "Unlike EmblemHealth, Independent Health is deeply rooted in Western New York. Our commitment . will not change."
The three nonprofit companies hold a virtual lock on the Western New York market that has successfully kept out national for-profit companies such as UnitedHealth Group, Cigna Corp. and Aetna - all of which have tried to break into the market at one time or another but failed to gain much traction.
Even Schenectady-based MVP Health Care, another upstate nonprofit insurer, has struggled to make a mark locally.
"Competition is welcome and makes us all better," said HealthNow's Julie R. Snyder. "As the region's leading health plan for 76 years and counting, we have seen many plans enter and exit our market."
The low profit margins in this region compared with other markets - because of lower health care costs and reimbursements than in areas such as New York City - make it less attractive to publicly traded, for-profit companies. And the would-be invaders have struggled to develop a broad provider network that compares to that of the big three, which share virtually the same group of providers that account for more than 97 percent of the marketplace.
Emblem has just 4,000 doctors signed up, with 7,000 locations, compared with more than 10,000 for each of the other three plans. And not all of the Buffalo Medical Group doctors have signed on, which brokers say is a big hole.
"There's still some issues with some of their network," said Gregory D. Leifer, director of life and employee benefits at Scott Danahy Naylon Co.
Still, Emblem has been working actively since last December to overcome that issue. And its size and nonprofit status may allow it to be more tolerant of lower returns, and more patient.
"Emblem has deep pockets and very vast resources to make a go of it," said Stephen G. Jepson, CEO of brokerage firm Crown Benefits Group in Buffalo and a former HealthNow senior executive. "It'll be interesting to see how well they do."