The Dayton-based health network joined health networks around the country that tried in recent years to not only operate hospitals but also sell their own insurance plans. But most health networks lost money on these insurance ventures, partially because aspects of the Affordable Care Act were not enacted or drastically changed.
The Dayton Daily News previously reported that Premier has lost more than $40 million between the start of 2016 and the middle of 2017 on its insurance arm, though the final data for 2017 has not been released yet.
Premier Health stopped selling its insurance plans on the Affordable Care Act marketplaces at the end of last year and had tried to sell its health insurance business to another company but that deal fell apart in December.
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“We did not see a future where we were going to be able to make it financially viable. And so therefore it was a bigger drain on the system where we are trying to put our resources to where they are needed by the community,” said Mark Shaw, Premier’s vice president of managed care.
Shaw also said that it was difficult to attract enough policy holders to their insurance business when the Dayton market is already dominated by large insurers like Anthem and UnitedHealthcare.
Premier, which operates four area hospitals, announced Friday that it will get out of the business of managing Medicare Advantage plans by April 1 and it will stop managing commercial insurance plans starting January.
While Premier will stop selling its own insurance plans, its hospitals and doctors will still accept the same insurance policies from other companies and managed Medicaid and Medicare plans.
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After Premier stops operating its Medicare Advantage plan by April 1, its Medicare Advantage enrollees will need to pick a new Medicare plan managed by a private insurer or they be auto-enrolled in traditional Medicare. After April 1, members who are auto-enrolled will still have until May 31 to shop and decide if they want to switch to another plan.
For those with Medicare Advantage looking for a new plan, the Ohio Department of Insurance provides Medicare beneficiaries with free health insurance information and counseling at 1-800-686-1578.
CareSource, a Dayton-based insurer that sells competing Medicare Advantage plans, sent a statement shortly after Premier’s announcement Friday, with Bob Brett, vice president of Medicare and Marketplace, saying “we want to be a resource to individuals left without coverage as a result of Premier’s decision to no longer offer these plans.”
Premier stated that its exit from the commercial insurance market at the beginning of 2019 will give business clients time to choose another insurer without needing to hold a special enrollment period for their employees.
Premier stated that its goal is to offer all employees who were working in the insurance business a job somewhere else in the organization.
Premier Health Plan was announced in August, 2014, at a time when hospital systems across the country dove into the health insurance industry. The Affordable Care Act appeared poised to create a flood of new customers to buy their policies.
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But the Affordable Care Act insurance marketplaces failed to attract enough young, healthy people to offset the high costs of caring for older and sicker policy holders. In June, Premier announced it was leaving the federal health insurance exchange.
The federal government under President Donald Trump’s administration also stopped paying subsidies to insurers on the marketplaces and the mandate for individuals to buy health insurance has been repealed.
“We went into it for all the right reasons, but the reality is the government changed some of the rules,” Shaw said.