Forming a Medicare Advantage plan with Mercy Health gives Health Alliance Plan of Michigan a position in West Michigan that will lead to the company offering commercial health coverage in the market, MiBiz has learned.
The Detroit-based HAP plans to follow up the creation of the region-specific Medicare HMO by introducing commercial health plans for West Michigan employers in 2021.
“We would be expanding other product lines like small group, commercial insurance and eventually we can look at large group as well,” said Margaret Anderson, senior vice president and chief sales and marketing officer for HAP.
“We’re very focused on growing all product lines,” Anderson said. “All of our product lines are things we will be considering as we plan for 2021.”
The health plan’s entry into West Michigan for commercial coverage would bring a new, viable option for employers across a market that’s dominated by Blue Cross Blue Shield of Michigan and Grand Rapids-based Priority Health, particularly in the small group market.
“While we have some outstanding carriers here in western Michigan, including the Blues and Priority Health, more competition is always good,” Shannon Enders, managing partner at Norton Shores-based Lakeshore Employee Benefits, wrote in an email to MiBiz. “Nobody wants to have fewer options. We know that competition drives inefficiencies out of the system.”
An annual report on health plan market share issued by the American Medical Association shows that across all health plans — HMO, PPO, point-of-service, and individual policies sold on the public health exchange — Blue Cross Blue Shield led the Grand Rapids metropolitan statistical area as of 2018 with a 57 percent market share. Priority Health was second with a 26 percent market share.
Blue Cross Blue Shield also led the Muskegon MSA across all plans with a 65 percent market share, which compares to Priority Health’s 20 percent.
In HMO coverage market share, Priority Health led Blue Cross Blue Shield 66 percent to 34 percent in the Grand Rapids MSA, and by 54 percent to 46 percent in the Muskegon MSA, according to the AMA report.
“It will be interesting to see what HAP brings to this side of the state,” Enders said. “New carriers often bring different plan designs and sometimes additional benefits the current carriers don’t offer.”
Owned by Detroit-based Henry Ford Health System, HAP has more than 570,000 people enrolled across its commercial, individual, Medicare and Medicaid health plans.
HAP would initially target commercial plans in the same four counties — Kent, Ottawa, Muskegon and Oceana — where its Medicare Advantage plan with Mercy Health now operates, according to Anderson. The health plan would then expand to other markets around the state, she said.
“We’re looking at all of the data for the rest of the state to decide how we’re going to prioritize that expansion. We just want to make sure that we’re being thoughtful and we’re not doing too much too fast,” Anderson said. “Certainly, the four counties that we’re already in will be a top priority and then we’ll continue to evaluate and flesh out the plan as we look at the data and see what makes sense for us to go next.”
West Michigan represents the “next step” for HAP in building a statewide network, she added.
Along with the launch of the new Medicare HMO plan, HAP was drawn to the market by a desire to diversify its Medicare and commercial base of business outside of Southeast Michigan, Anderson said, also citing the region’s favorable demographics and high quality scores among care providers.
HAP also owns Grand Rapids-based ASR Health Benefits, a third-party administrator for self-funded health plans that has well-established connections with employers, she said. HAP can leverage those business relationships in the region, Anderson said.
“While they only do self-funded work out of ASR, certainly there are opportunities that come across their desk that are fully insured — both small groups and large groups — that would really fit well with a HAP option,” she said.
HAP’s foray west starts with the Medicare HMO known as HAP Choice Medicare, which was built jointly with Mercy Health.
HAP launched a similar Medicare plan a year ago with large physician groups in Southeast Michigan. Trinity Health, the Livonia-based parent corporation of Mercy Health, approached HAP about bringing the model to West Michigan.
A narrow network plan that offers coverage good at Mercy Health providers, HAP Choice Medicare offers two benefits packages, both of which feature zero deductibles and copays for primary care physician visits, outpatient diagnostic lab tests, annual physicals, routine eye exams and hearing exams.
HAP Choice Medicare also co-pays for cardiac and pulmonary rehab visits, physical therapy, occupational therapy and speech therapy visits, as well as visits for behavioral health and substance abuse. Enrollees also have 24-hour access to telehealth programs for immediate consultation and no-cost gym memberships.
In working directly with HAP, Mercy Health wanted to craft a Medicare plan to “take care of our patients in a different way,” said Shaun Raleigh, vice president of population health management at Mercy Health’s Affinia Health Network, which consists of 1,700 employed and independent doctors.
HAP Choice Medicare fits with Mercy Health’s mission statement to “be a transforming and healing presence within our communities.”
“What that means is that we have to look at doing things differently in health care. Obviously, what we’ve been doing since the ’60s isn’t working,” Raleigh said. “We created a plan that’s going to work in a symbiotic way to maximize their care.
“We really feel that by reshaping these relationships with the payers, we’ll have more accountability and ability to improve the quality of care that we give to our patients as well as the cost, and help us live up to our mission.”
As of last week, HAP Choice Medicare had enrolled 1,500 members, which Raleigh calls “pretty good for a new product launch.”
Mercy Health launched a similar Medicare plan with Priority Health in July, Raleigh said.
In the commercial health insurance market for employers, Mercy Health has had “very early” talks with HAP about a narrow network or tiered product, Raleigh said.