The region’s health insurance companies are facing a difficult financial landscape.
Changes driven by health care reform and trends in the industry that have accelerated over the past several years are putting increasing pressure on the companies’ bottom lines.
A rise in employers choosing to self-insure. Lagging payments from the federal and state governments for Medicare and Medicaid members. Taxes imposed as part of the Affordable Care Act. Higher medical and hospital costs. Soaring prescription drug prices.
The region’s three largest commercial health insurance companies — Excellus BlueCross BlueShield, parent of Univera Healthcare; HealthNow New York, parent of BlueCross BlueShield of Western New York; and Independent Health — all suffered operating losses in the most recent year for which their financial statements are available, and 2016 promises to be another challenging year for the nonprofit insurers.
Fidelis Care New York, for its part, has fared better. The insurer, best known for its government-sponsored insurance, is a major provider of managed Medicaid in Western New York and is a popular choice on the NY State of Health insurance exchange here and across the state.
Fidelis Care and the other insurers do see an opportunity to gain market share on the exchange with the collapse late last year of the region’s most popular provider on the exchange, Health Republic Insurance, while regulators and lawmakers continue to investigate why Health Republic failed.
The commercial insurers say they also are seeking to shift from a fee-for-service model to one where value-based payments are tied to performance and health outcomes.
Here follows more information on the four insurers:
Fidelis Care New York:
Headquarters: Queens, with a large facility in Amherst’s CrossPoint Business Park
Total revenue, 2014: $5.47 billion
Medicare revenue, 2014: $270 million
Medicaid revenue, 2014: $4.4 billion
Operating income/(loss), 2014: $249.7 million
Net income/(loss), 2014: $265.1 million
Enrollment, NY State of Health exchange, in WNY, through February 2015, as percent of total: 17.5 percent
CEO compensation, 2014: Rev. Patrick J. Frawley, $2.8 million
Total membership: 1.3 million
Total employment, most recent figures available: 2,888
Fidelis Care, which is the New York State Catholic Health Plan, doesn’t offer commercial coverage, but is a major provider of managed Medicaid, Child Health Plus and Medicare.
Looking ahead for 2016: The company is seeking to grow its mission and grow enrollment, with competitive rates for its managed Medicaid, Medicare and NY State of Health exchange plans, said David Thomas, Fidelis Care’s executive vice president. Fidelis Care also is looking to recruit more providers into its network, expanding access throughout the state, and continues to invest millions of dollars into information technology infrastructure and IT workers. The company also seeks to improve customer service, for members and providers, and for efficiency’s sake to steer more customer service contacts online, Thomas said.
Excellus BlueCross BlueShield (parent of Univera Healthcare):
Headquarters: Rochester (Univera is based in Amherst)
Total revenue, 2014: $5.94 billion
Medicare revenue, 2014: $1.16 billion
Medicaid revenue, 2014: $799.6 million
Operating income/(loss), 2014: ($55.3 million)
Net income/(loss), 2014: $24.2 million
Enrollment, NY State of Health exchange, in WNY, through February 2015, as percent of total: 2.4 percent (Univera)
CEO compensation, 2014: Christopher C. Booth, $1.8 million (Excellus); Arthur G. Wingerter, $438,996 (Univera’s president)
Total membership: 1.5 million (Excellus), 51,000 (Univera alone)
Total employment, most recent figures available: 3,400 (Excellus), 490 (Univera alone)
Excellus, the parent company, is larger than HealthNow or Independent Health. But it operates locally as Univera, the smallest of the region’s three main commercial insurers.
Looking ahead for 2016: Rates for 2016 are already set but Univera looks to work with state regulators on responsible, sustainable rate setting for the NY State of Health exchange for 2017 and beyond, Wingerter said. Health care reform has brought benefits, and challenges, but hasn’t done much to control costs and he wants to see more of that, particularly in the area of rising drug costs. Mandated coverage of behavioral health and telemedicine will be issues in 2016. And Univera will look to get back into the safety-net, managed Medicaid program in 2016 after exiting in 2015, Wingerter said.
HealthNow New York (parent of BlueCross BlueShield of Western New York):
Total revenue, 2014: $2.44 billion
Medicare revenue, 2014: $731.3 million
Medicaid revenue, 2014: $219.3 million
Operating income/(loss), 2014: ($69.4 million)
Net income/(loss), 2014: ($52.3 million)
Enrollment, NY State of Health exchange, in WNY, through February 2015, as percent of total: 20.3 percent
CEO compensation, 2014: David W. Anderson, $1.1 million
Total membership, most recent figures available: 900,000
Total employment, most recent figures available: 1,850
HealthNow operates locally as BlueCross BlueShield of Western New York and in the Albany area as BlueShield of Northeastern New York. It is the Buffalo area’s largest insurer.
Looking ahead for 2016: Improving coordination of members’ health care with hospitals and doctors remains a focus. With 25 percent of members now enrolled in high-deductible plans, members have “skin in the game now” and the insurer is doing more to help members know the cost of their care and their prescription drugs, according to the insurer. BlueCross BlueShield plans further lobbying in Albany and Washington, because it says unneeded regulations make it hard to serve members.
Total revenue, 2014: $1.84 billion
Medicare revenue, 2014: $779.1 million
Medicaid revenue, 2014: $302.6 million
Operating income/(loss), 2014: ($75.1 million)
Net income/(loss), 2014: ($60.2 million)
Enrollment, NY State of Health exchange, in WNY, through February 2015, as percent of total: 13.4 percent
CEO compensation, 2014: Dr. Michael Cropp, $1.6 million
Total membership, most recent figures available: 410,000
Total employment, most recent figures available: 1,086
Region’s second-largest insurer also operates Pharmacy Benefit Dimensions, which manages pharmacy benefit for 135,000 members, and a self-funded affiliate, Nova Healthcare Administrators, which administers dental coverage for 58,400 members.
Looking ahead for 2016: More partnerships with high-performing physicians and other providers that promote alternative reimbursement models, shifting from pay-for-volume to pay-for-value, according to Independent Health. Added a small-group wellness program, FitWorks Rewards, with built-in incentives to encourage employees to adopt healthy behaviors, leading over time to lower medical costs. Further collaboration with organizations such as the Buffalo Bills, the YMCA Buffalo Niagara, GOBike Buffalo and Buffalo RiverWorks, to boost community access to fitness and nutrition.
Sources: state Department of Financial Services and the insurers.