As the health insurance industry prepares for a major transformation under Obamacare, it’s an uncertain time to get into the business. But that’s exactly what Community Hospital of the Monterey Peninsula is doing.
CHOMP plans to offer a Medicare Advantage plan, beginning Jan. 1, through CHOMP Foundation subsidiary Aspire. Medicare Advantage is a variation on the federal health plan for seniors, offered and administered by private companies that contract with Medicare.
A new plan will make local Medicare offerings competitive for the first time, giving seniors a choice when it comes to their coverage. Many seniors buy supplemental insurance to cover drugs and pad standard Medicare; Aspire could potentially fill those gaps.
“The decision was made to go into the Medicare Advantage business because it’s a product absent in this particular community, and it’s very popular in other communities,” Aspire Chief Operating Officer Scott Kelly says. “We think we can do a better job of meeting local needs than having a national company come in and tell us how to do it.”
CHOMP has hosted community meetings on the plan in Marina and Carmel, with another scheduled in Salinas Aug. 23. But while hospital officials talk up the virtues of a local alternative to federal Medicare, they can’t yet address the plan’s specifics – including what it will cost.
Kelly’s awaiting final authorization from the feds, expected Sept. 1, before Aspire can go public with premiums and coverage details.
“Right now all the signals we are getting are positive and encouraging,” Kelly says, “but I can’t know for sure until I get that letter that we are going to be out there in the market.”
Still, he’s at work setting up claims and customer-service departments.
The foundation so far has spent about $3 million developing the plan, including staff, research and legal costs.
“It is a considerable undertaking to develop and implement a new insurance plan, but we see this as part of our commitment to the community amid the changing health-care landscape,” CHOMP CEO Steven Packer says. The foundation expects to recover its costs within three years of launching Aspire.
Kelly forecasts several thousand Medicare beneficiaries will enroll in 2014. “The satisfaction level of this program is more positive than the standard Medicare program,” he says.
That may be true on a statewide level, but today, there are just five Medicare beneficiaries enrolled in the only two Advantage plans available locally, both offered by Universal American.
Universal American President Robert Waegelein says the company is barely active west of the Mississippi, and he sees business potential for CHOMP. “That’s a smart move,” he says. “It’s a nice expansion opportunity.”
So far about 300 physicians, Natividad Medical Center and Mee Memorial Hospital are signed up to accept Aspire along with CHOMP; talks are in progress with Salinas Valley Memorial Healthcare System.
That breadth could make the plan attractive, says Bob Petty, an adviser to the nonprofit Partners in Transitions. But he cautions that out-of-network offerings matter, too.
“Two things I’d advise people to understand: drug benefits and options for seeing providers in and out of the geographic area,” he says. “Aspire is really designed to be a local plan. What happens if you’re in Phoenix and you need to go to the doctor?”