“The ongoing UPMC-Highmark dispute in western PA has concerned many of our employees,” the memo read. “As members of the UnitedHealthcare network, employees will no longer have to worry that they would be restricted to either Highmark or UPMC providers.”
Erie Insurance spokeswoman Leah Knapp added that the decision to switch plans was “primarily about providing our employees with access to the broadest network of healthcare providers across our footprint and ensuring they have the tools to lead healthy lives.” Erie's CEO, Terrence Cavanaugh, also happens to sit on the board of Highmark Health, Highmark's parent company.
Earlier this month, Highmark and UPMC outlined terms of a government-brokered agreement. Effective Jan. 1, the contract between UPMC and Highmark expires. Although seven UPMC hospitals and thousands of UPMC-employed specialists will still be considered in-network for Highmark members, UPMC's six major hospitals and doctors who perform procedures there will be out of network.
Highmark, a Blue Cross and Blue Shield affiliate, and UPMC have been fighting several battles. The drama hit a fever pitch after Highmark agreed to acquire West Penn Allegheny Health System, UPMC's biggest competitor in the greater Pittsburgh area.
Erie Insurance is not the first employer to drop Highmark recently. Last year, Westinghouse Electric Co., based in Cranberry Township, Pa., just north of Pittsburgh, switched from Highmark to Aetna. Despite the consent decree, many in the area believe the feud will persist and will affect more large employers in how they choose a health plan provider.
Diane McClune, a vice president at the Pittsburgh Business Group on Health, said many employers are at least considering adding a large insurance company to compete with their Highmark plans. Of the 75 Pittsburgh-area employers her group represents, she said, 60% had Highmark as their primary health plan for employees in 2014. However, going into 2015, a majority will be making a switch or alteration of some sort to ensure employees' primary providers are in network.
“Our sense is they are adding national carriers to fill that uncertainty” between UPMC and Highmark, McClune said. Roughly 55% of large Pittsburgh employers are making changes to their health plan options due to concerns over access and disruption for employees, she said.
Despite Erie Insurance's decision, Highmark still expects to retain a large share of the Erie, Pa., market, said Highmark spokesman Aaron Billger. Many consumers in the Erie market traditionally pursue tertiary care at the Cleveland Clinic, located about 95 miles away, rather than Pittsburgh, which is about 125 miles away, he noted.
“We're disappointed that a local company would leave another local partner to go to a national insurer, but we understand healthcare is transforming,” Billger said.
Follow Bob Herman on Twitter: @MHbherman