HIX Pains Now, But Hope for Long-Term Relief in NH

New Hampshire has only one health insurer participating in its federal exchange marketplace, but state lawmakers and regulators are optimistic that other payers will join the market in 2015.

Anthem's standing as the sole insurer in New Hampshire's federal exchange marketplace has created a painful experience for some hospitals and patients, but relief is on the horizon, state lawmakers and regulators say.

"I think it's going to self-correct in a year, which is a long time for patients and providers to wait, but it's the law," said Thomas Sherman, MD, a gastroenterologist and Rye Democrat who was elected to the state House of Representatives in 2012.

See Also: Frozen Out of HIX, NH Hospitals Feel Burned

Sherman says Anthem Blue Cross Blue Shield of NH appears to have complied with state and federal law when it crafted Anthem Pathway, the only health insurance exchange product  in the Granite state approved to enroll patients in 2014. The Anthem Pathway network includes 16 of the state's 26 acute care hospitals.

Anthem officials have cited the need to contain premium increases for individual policies—estimated as high as 40 percent—as the driving force behind the company's decision to design a narrow network.

"The ACA was designed with the fundamental premise that the public would not tolerate public funding of health care," said Sherman, who practices at Exeter Hospital, which is in Anthem Pathway's network. "You can't really punish people for following the rules."

"I absolutely get the devastating effect of a narrow network on patients and providers," he said. "But a knee-jerk reaction to pass legislation may not solve the problem."

'The Spirit of the Law'
Top executives at several of the hospitals excluded from Anthem Pathway are chafing under a provision of the law that allows exchange health plans to require patients to travel as far as 90 miles for services.

"I don't think people should be bullied into driving an hour to get their health care," said Peter Wright, president and CEO of Valley Regional Hospital in Claremont, NH. "They created a product that maximized the value to their investors. Anthem didn't follow the spirit of the law."

Wright said being left out of Anthem Pathway poses significant transportation hardships for patients in Claremont, which is among the most disadvantaged communities in the state. "We have to make a choice of what's more important: maximizing an insurance company's profits or providing access to affordable health care to the residents of New Hampshire who need it," he said.

Charles White, COO of Upper Connecticut Valley Hospital in Colebrook, NH, said he suspects Anthem avoided economically challenged communities when it designed its narrow network. "The most disadvantaged hospitals were red-lined out of the network," he said, noting UCVH would have accepted Anthem Pathway's relatively low reimbursement rates because the hospital relies on commercially insured patients to remain economically viable. "We would have taken the product even though it would have hurt us financially."

Chris Dugan, communications director for Anthem Blue Cross Blue Shield of NH, flatly denied the company had written off any providers. "This is certainly not the case," he said. "More than 90 percent of our customers will continue to use Anthem's broad network, which includes all of the state's hospitals. Importantly, we also anticipate that many of the individual members purchasing an exchange product in 2014 will have previously been uninsured. That means that all New Hampshire hospitals should benefit from a reduction in the amount of uncompensated or charity care"

Dugan said Anthem expects to continue doing business with all of the hospitals in New Hampshire through other products. "The fact that a hospital or provider was not chosen for this network is not at all a reflection of Anthem's relationship with that provider," he said. "Anthem views all of its contracted providers as high quality and is pleased to continue to partner with them on the vast majority of our business for small and large groups, senior, and grandfathered plans."

Single-Player Marketplace
While acknowledging that a more competitive marketplace is desirable, state Deputy Insurance commissioner Alex Feldvebel said the federal exchange's modest beginning in New Hampshire is in line with regulators' expectations.

"It wasn't too surprising that in Year One there was only one player," he said of Anthem Pathway, adding, "it wasn't surprising that Anthem was the only player."

Feldvebel said Anthem held about 90 percent of the individual health plan policies in the state before this year. "It's typical in a state with a small population that one or two players constitute the whole market (for individual policies)," he said. "There aren't enough lives out there to sustain more than one or two players."

The state Insurance Department thoroughly vetted Anthem Pathway to make sure the narrow network followed state and federal law, Feldvebel said. "Our role was to review the filings," he said. "And we did that, and the adequacy standards were met."

State Sen. Nancy Stiles, (R-Hampton), said Anthem had several advantages over potential competitors when New Hampshire was launching its health insurance exchange, including a longstanding and broad presence in the state. "They were familiar with the process," she said.

Stiles, who has taken a leading healthcare reform role in the Republican-controlled Senate, said she also wasn't surprised when Anthem emerged as the only company offering a health insurance exchange product in 2014. "The single player in the market was pretty much set up from the beginning," she said. "We are getting to a point where we can move forward."

Boosting the Marketplace
Stiles, Feldvebel, and Sherman are all optimistic that New Hampshire can expand the range of options available to individuals who purchase a health insurance exchange plan beginning next year.

"I'm very hopeful," Feldvebel said. "The real solution to this issue isn't to have nationalization of Anthem; it's to increase competition in the marketplace."

The deputy insurance commissioner noted that Harvard Pilgrim Health Care has been approved to join the exchange marketplace in 2015 and Minuteman Health Inc. is seeking regulatory approval. He said Minuteman could be a valuable addition because it is a nonprofit organization intent on following a co-op model. "They have a lot of work to do, but we're hopeful they can get up and running, and get in the market in 2015."

With a key procedural deadline looming over the Statehouse, Stiles said she is hoping lawmakers can craft legislation that will encourage more players to enter the exchange marketplace soon. "Conversations are going well," she said. "If it's going to happen, it has to happen before the end of March. … There are still opportunities. I am forever the optimist."

Sherman said there are three managed care organizations serving Medicaid patients through the state Department of Health and Human Services and at least one of them is considering offering a health insurance exchange plan. "Their forte is to provide comprehensive care at low cost," he said.

When it comes to reaching a political deal between the Democratic House and the Republican Senate to advance health care reform efforts in the Granite State, Sherman has adopted a watchful-waiting approach, particularly on the highly contested issue of expanding Medicaid in the state.

"I have co-sponsored bills with them on other issues, but on (Medicaid expansion), they are going to disagree with me," he said of Republicans in the Senate. "We still have hope for compromise on these things, and I want to keep that hope alive."