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The New Health Insurance Landscape in Cleveland, January 1, 2018

By Dr. Arthur Lavin

Some major developments are coming to our Cleveland health world at the start of the New Year, and it is worth a moment to understand what is changing.

The Key Domains of Health Insurance in America

We all know that health care is very expensive, particular when buying procedures, complicated surgeries, or hospital stays.   Because of this reality, most families seek health insurance to avoid financial ruin should a serious medical catastrophe strike.

Across the world, two sorts of solutions to this challenge exist.  In poor countries, most people have neither insurance nor health care.  In developed countries, everyone has health insurance and everyone has the health care they need.

The United States, our country, stands alone across the world, as the only developed country in which not everyone has health insurance and not everyone has the health care they need.

Instead, Americans have to turn to one of 3 sources of health insurance:

  1. Government health insurance
  2. Commercial insurance through employer offered health plans
  3. Commercial insurance as an individual.

Let’s take a look at each of these three.

The government health insurance choices are Medicare, Medicaid, and military related health insurance.  Medicare is available only to Americans 65 years old and older.  The military offers active duty soldiers insurance via Tri-Care, and veterans via the VA.  Medicaid covers specific groups of Americans including the aged, blind, and disabled, as well as all those with an annual income below a certain threshold.

Commercial health insurance through employer offered health plans used to be the only other way to get health insurance outside of government programs.   These plans are created out of negotiations between health insurance companies and employers such as GE, Lubrizol, PNC, etc.  These plans are referred to as group plans because the plans are only offered to groups of employees.  Insurers offering group plans include all the major health insurance companies such as Anthem, Aetna, Cigna, Medical Mutual, and United Health Care.

Commercial health insurance as an individual is a new source of health insurance, really only becoming available since the passage of the Affordable Care Act, or Obamacare.  Prior to this law, one person could never negotiate a good premium, and so few did.  After passage of this law, millions of individuals can band together under the creation of what is called the individual marketplace, and achieve premiums that are actually now lower than group plans via employers.  The individual marketplace in NE Ohio is where some of the big changes are coming this New Year

Happy New Year- the big changes coming to the Greater Cleveland community this January

First of all, in the government offered health insurance plans, no major changes are expected in a month or so.

When it comes to the commercial health plans made available to groups of employees, the same companies will continue to offer pretty much the same plans in the new year.  But the major change in this domain is that these plans will be substantially more expensive than plans people can purchase on the individual marketplace at www.healthcare.gov.

But the biggest change, and it is very major, coming to our community on New Years Day, has to do with those plans offered neither by the government nor by our employers’ negotiated commercial plans, but by those offered to individuals by commercial health insurance companies.  These again are the plans available in the individual marketplace.

All this year, in 2016, plans in the individual marketplace included options that covered care at essentially all the major medical centers in Cleveland.  That ends on New Years Day.

Starting January 1, 2018, only two commercial, non-Medicaid related, companies will offer plans to individuals via the individual marketplace.   One is very familiar, long Ohio’s largest health insurance company, Medical Mutual.  The other is brand new, a health insurance company that has only existed since  2012, called Oscar.

If you go to the main web page for Oscar, and go to the part explaining the company, https://www.hioscar.com/about, there is little detail on the story of Oscar.  Other sources of information on Oscar tell us it was started, as noted, in 2012.  The founders were three classmates at Harvard Business School and one of these founders was Jared Kushner’s brother, Joshua Kushner.    The name Oscar is in honor of Joshua and Jared Kushner’s great-grandfather, Oscar.

Oscar began selling individual health insurance plans via the individual marketplace in 2012 in NY, NJ, and Texas.  In 2017 it ceased selling plans in NJ, and cut its market size in NY in half.    More recently Oscar directed its activities towards a swath of new states including  Tennessee, California, and now, Ohio.

So, the big news for 2018 is that the Cleveland Clinic has reached a major agreement with Oscar.   This agreement led to Oscar offering a set of plans on the individual marketplace that will only cover services offered by the Cleveland Clinic to families living in Cuyahoga County.

Soon after this deal was reached, Medical Mutual announced it was going to offer a new set of individual health plans that would only cover services offered by University Hospitals to families living in Cuyahoga County.

And, all other health insurance companies would no longer offer commercial individual marketplace plans in Cuyahoga County

The commercial individual plans in our community when 2018 starts

For the first time in my memory, there will be only two insurance companies offering health insurance to very large numbers of our fellow citizens.

They will be Oscar and Medical Mutual.  Each only covering services at one medical center.  Thousands and thousands of families now face the choice of either moving all their care to the Clinic or to UH, an unfortunate choice.

At Advanced Pediatrics

We are pleased to announce that both Oscar and Medical Mutual have confirmed that they will cover services by Dr. Hertzer and Dr. Lavin at Advanced Pediatrics.

Further, we both are committed to making sure we can help families secure the services they need from sub-specialists, surgeons, and hospitals no matter what the new landscape demands.

BOTTOM LINES

  1. Health insurance is vital to every American family.
  2. Families can obtain health insurance from three domains:  from the government, from commercial insurers who offer plans to groups of employees, and from commercial insurers who offer plans to individuals.
  3. Government health plans include Medicare, military related plans, and Medicaid.  Each are accessible only by strictly defined groups.  For example, Medicare can only be offered to people 65 years of age or older.
  4. Commercial insurers who offer plans to groups of employees only do so through negotiations with each company.  There remain a relatively large number of insurance companies that make such plans available.  People can only access these plans via their employer, and only at companies that have negotiated such plans.   In 2018, these plans will be on average $300 a month or so more expensive than the last category of plans, those purchased by individuals.
  5. The last category are plans offered by commercial health insurance companies via the mechanism of banding together millions of individuals, the so called individual marketplace.  This mechanism is the only one that allows any individual in America to buy their own health insurance plans.
  6. On January 1, 2018, the individual commercial health plans will only be offered by two companies.
  7. One is our area’s largest insurer, Medical Mutual, and will do so only with a new product that only covers services at UH.
  8. The only other one is brand new to Ohio, Oscar, founded by Joshua Kushner, Jared Kushner’s brother, and will do so only with a new product that only covers services at the Cleveland Clinic.
  9. Advanced Pediatrics will be covered by both Oscar and Medical Mutual in the individual marketplace, and a wide variety of commercial group plans. 

We stand ready to be sure we will be as helpful as possible as the health insurance world remains in flux.

To your health,
Dr. Arthur Lavin

 

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