Vital Signs

The Healthcare Business Blog

Mass. regulators give Minuteman Health HMO license, rate approval

By Jonathan Block

Minuteman Health, a not-for-profit, consumer-governed health plan sponsored by Vanguard Health Systems and Tufts Medical Center, said Monday that it received an HMO license and premium rate approval from Massachusetts regulators.

The plan will offer individual and small-group plans both on and off Massachusetts' state insurance exchange starting in October.

Minuteman is one of the Consumer Operated and Oriented plans in 24 states around the country made possible by startup loans authorized by the Patient Protection and Affordable Care Act. The goal is to encourage the launch of consumer-friendly plans that foster greater competition in the insurance market. While other co-op plans around the country previously received approval to sell plans on state insurance exchanges, what sets Minuteman apart is that it was originally sponsored by two major hospital systems. Many of the co-op plans were organized by groups and individuals not associated with major providers or investor-owned companies like Vanguard.

Minuteman was founded last year by Tufts Medical Center, Vanguard Health Systems and the New England Quality Care Alliance. By law it has to operate independently with its own consumer-governed board. Its provider network will include some hospitals and physicians owned and operated by Tufts and Vanguard, as well as other facilities not owned by them.

When co-op plans were included in the healthcare reform law, some critics dismissed them, arguing they would have a hard time forming provider networks, hiring experienced health plan executives and competing with established insurers.

The co-op plan movement wasn't helped when Congress in January eliminated $1.4 billion in additional funding earmarked for startup loans, leaving many fledgling co-op plans strangled in the crib.

On its Web page, Minuteman states it will be member-governed, with members electing the board of directors, and that it will provide “unprecedented transparency” and “increased efficiency” in the way it operates.

Kathleen Oestreich, CEO of Meritus, a co-op plan in Arizona that recently received approval from regulators in that state to offer coverage in and out of the exchange there, said plans like hers can stand out, even without major name recognition. That's because co-op plans are designed to put members first, and, just as important, work more closely with providers to achieve better patient outcomes and lower costs, she said. Meritus will offer 30 HMO and PPO plans on Arizona's exchange.

Oestreich explained that the provider community was instrumental in giving feedback on how the co-op plan should be run. As a result, she said, her plan already has strong relationships with many provider networks throughout the state, which are giving Meritus the same rates as they give large, established insurers.

If co-op plans gain favor with consumers and providers in 2014, commercial insurers may have to recognize a feisty new competitor in the market.

Follow Jonathan Block on Twitter: @MHjblock


What do you think?

Share your opinion. Send a letter to the Editor or Post a comment below.

Post a comment

Loading Comments Loading comments...




Search ModernHealthcare.com:


 

Switch to the new Modern Healthcare Daily News app

For the best experience of ModernHealthcare.com on your iPad, switch to the new Modern Healthcare app — it's optimized for your device but there is no need to download.