ATLANTA—Credit union interest in offering a private health insurance exchange to members continues to be limited, but participation should pick up in 2015, predict analysts who see the online exchanges eventually working for CUs—and for more than health insurance.
The snags that plagued the rollout of Obamacare combined with consumers’ and credit unions’ fears of being the first to take on a new concept have helped to stymie early response to various healthcare exchanges that have been pioneered by credit unions over the past year, according to sources.
This year, enrollment in the public exchange, Healthcare.gov, topped eight-million despite problems with the website. Early reports indicate 2014 enrollments are going more smoothly.
“Like with almost anything new, people have been skeptical at the start,” said Annette Bechtold, SVP of regulatory affairs and reform initiatives for health benefits advisory firm Digital Insurance. “They think it’s a good idea, but they also think it’s a good idea to wait. As we move into year two of these offerings, and health insurance exchanges become a more commonplace healthcare solution, interest will pick up.”
The Iowa CU League last year partnered with Des Moines, Iowa-based CoOportunity Health to offer health insurance products to CUs in Iowa and Nebraska.
Jim Niederhauser, ICUL
“To say credit union interest has been slow is fair. When we kicked this off last fall the exchanges faced a great deal of complexity and challenges. And let’s face it, overall, health insurance exchanges did not perform to the level everyone expected,” said Jim Niederhauser, ICUL VP of member services.
Regulator Takes Control Of CoOportunity
At the close of December, the Iowa state insurance commissioner submitted a petition for an Order of Rehabilitation for CoOportunity Health. The Insurance Department stated its move was made due to concerns over CoOportunity Health’s “insufficient capitalization” and the company’s “inability to obtain additional capitalization from the Centers for Medicare and Medicaid Services, the unavailability of federal payments of the risk mitigation programs until the second half of 2015, and extremely high healthcare utilization.”
In Birmingham, Ala., Wayne Benson, president/CEO of EPL, a technology CUSO that has partnered with Health Partners America to introduce the Credit Union Exchange Blueprint, a national private health insurance exchange for CUs, said what is adding to tentativeness among consumers and FIs is that parts of the Affordable Care Act still need defining.
“Not all of the (Affordable Care Act) has been written,” he explained. “There is a lot of confusion out in consumer land—people are hearing different stories coming out in the media, and I don’t think consumers yet know what to really think.”
Benson acknowledged that credit unions have been slow to sign on with CU Exchange Blueprint.
“There are a number of credit unions participating and I know of many who see an opportunity in the future,” said Benson, pointing to factors contributing to overall wariness.
Jeff Chesky, Insuritas
Benson contends that credit unions already face a great deal of pressure in managing regulatory burden and mastering growing complexity in the their business lines, and that with the newness and confusion surrounding exchanges, “It’s easy to focus on other things.”
Jeff Chesky, CEO at East Windsor, Conn.-based Insuritas, attributes limited CU interest to fear of potential damage from aligning with an emerging insurance solution. “The last thing credit union CEOs want is to have an exchange fail and then all of a sudden their brand is impacted negatively and they are getting member complaints.”
ICUL Aligns With CMG
The number of credit unions that signed on with CoOpportunity Health during the 2013 enrollment period through the Iowa league reflects CU hesitation. Andrea Dose, ICUL member outreach coordinator, said 46 credit unions across Iowa and Nebraska partnered with CoOpportunity Health in 2013 and about 100 members enrolled through credit unions.
This summer the league aligned with CUNA Mutual Group when the company announced it was entering the health insurance arena by partnering with the GoHealth exchange. Dose said that of the 38 CUs that have signed up with CUNA Mutual through the league, 22 had been enrolled with CoOpportunity Health.
Niederhauser pointed out that despite marginal CU interest, and the eventual problem the healthcare exchange faced, overall CoOpportunity Health insured more than 75,000 individuals last year. “That is testament to fact there is need for health insurance exchanges.”
CUNA Mutual, as well, has reported that 1,228 CUs now endorse TruStage Health for their members through the company’s MemberCONNECT program.
Andrea Dose, ICUL
“Total membership at those credit unions is 14.3 million,” noted Phil Tschudy, CUNA Mutual media relations manager, saying it is too early to gauge member enrollment. “We’ve been very satisfied with credit union response to the program.”
Private health insurance exchanges offer credit unions a new revenue stream and can position the credit union within the community as a trusted resource for members’ many needs.
Dose explained that in conversations with credit unions, revenue has not been the driving reason for participation. “There is revenue to be made. But being a trusted member resource now is their primary motivation.”
Niederhauser added that exchanges, too, help CUs reach out to the underserved.
Longer term, some analysts see health insurance exchanges as just the start of expanded offerings the credit union can deliver to members through an online benefits portal.
“Health insurance is only one component of an exchange strategy,” proposed Benson. “Through a portal members can get access to life insurance, ADD and disability coverages, for example. I think exchanges are going to be an entirely new avenue for members to access products outside of deposits and loans.”
Chesky, whose company offers a range of insurance products to CUs to deliver to members, considers credit unions the “perfect place to provide a seamless frictionless online customer-centric shopping experience for health and wellness, once this exchange infrastructure is fully developed. I am convinced credit unions are one of the best places to provide consumers not only products they need in their daily lives, but also the information and research needed to make the right choices.”
Exchange Products Fill Gaps
If a CU chooses not to formally offer a health insurance exchange to members, it can still provide information about exchanges and a link to options on its website, proposed Chesky. “Then the credit union could offer products that fill the gaps that a member may have in their health coverage, such as prescription drug or vision coverage.”
The future for health insurance exchanges will be dictated largely by how well they keep health insurance costs under control, or possibly reduce them. Early reports are mixed as to whether that is happening. But Chesky insists it is too early to make any call.
“It will take carriers several years to stabilize pricing under the Affordable Care Act, and many years to assemble claims histories to properly assess risk,” said Chesky. “You can’t make any assumptions now because they will be tempered by the actual experiences of the insureds.”
Chesky is optimistic health insurance exchanges will take hold in the U.S. “I think we will look back some day on the exchanges like my parent’s generation looked back at the government’s decision to put Social Security in place.”