July 14, 2013; Crain’s New York Business


It’s a brave new world for nonprofit health insurers like Fidelis, a New York firm with 885,000 members. Crain’s says that Fidelis is the state’s largest insurer of low-income New Yorkers through the state’s own health insurance programs. Now, with the impending start-up of the New York Health Benefit Exchange created as a result of the Affordable Care Act, Fidelis can generate and market new products to a wider range of people: customers or members who would buy insurance as individuals on the exchange.

Crain’s notes that Fidelis’s 2013 revenues rose to $4 billion from $3.3 billion in 2012, giving the firm the capital to invest in getting ready for the exchange. Its challenge is that it has largely been an insurer, providing products with prices established by government. Now, Fidelis and other nonprofit health plans have to figure out how to design, price, and market products to be sold to individuals and small businesses on the exchanges.

Implementation of national health insurance reform may look slow in some parts of the legislation, but the timetable for the state exchange in New York is going to be rapid. The State of New York invited insurers to participate in the exchange on January 31st of this year and set April 5th as the due date for insurers to apply. Although the timeline suggests that insurers will have been informed whether they would be allowed to participate or not by yesterday, the state will announce sometime this month which health plans will be approved for its exchange. Enrollment will begin in October for coverage that will start in January 2015.

For Fidelis and others, products and pricing aren’t the only challenges. There’s also educating potential customers about their insurance offerings. For that, nonprofit advocates are going to be playing important roles. In Dallas, for example, Blue Cross and Blue Shield of Texas announced that it has signed up 100 community organizations to help educate and enroll consumers for health insurance purchases. The Obama-connected nonprofit Organizing for Action and the nonprofit Enroll America have announced plans for a summer of activism promoting the new health insurance law.

In Rhode Island, Blue Cross ran a simulated exchange to test how people would behave as individual health insurance purchasers. They discovered a number of problems, including difficulties in reaching Latino purchasers, limitations in consumers’ knowledge making it difficult for them to compare plans, and a general tendency for participants to select plans simply by the cost of the premium, as opposed to considering other important issues like the deductible costs or prescription coverage.

There may be nonprofit insurance providers on the exchanges, but there will also be small nonprofit organizations and individual nonprofit workers purchasing insurance on those exchanges. Perhaps slightly overstated for a press call, Danielle Clore, the executive director of the Kentucky Non-Profit Network, told the press that she sees “a lot of confusion” among nonprofits and their staff as they push for clarity on their health insurance options, but “they are not getting any answers.” With the exchanges scheduled to start up within months, both the nonprofit Fidelis in New York and the members of the Kentucky Non-Profit Network had better get reliable answers soon.—Rick Cohen