How Maine Community Health Options keeps premiums affordable

Editor's note: This is part two of a two-part series

While some insurers around the country have proposed drastic rate hikes, Maine Community Health Options (MCHO), the state's consumer operated and oriented plan (CO-OP) that serves Maine as well as New Hampshire residents, has been able to keep prices in check.

One of MCHO's many goals from the beginning has been to provide members with price stability, MCHO CEO Kevin Lewis says in an interview with healthcare reform expert Kip Piper in his latest MediStrategy podcast.

"From 2014-2015, we've dropped our nongroup policies by almost 1 percentage point, and have dropped our small group rate by 10 percent," Lewis says. The drop in rates is thanks to lean administration, high-touch services and making sure members receive care quickly, he adds.

From the beginning, MCHO has experienced a pent-up demand, which has led to a balanced risk pool. This balance especially is important considering that the main factors affecting health insurance premium increases for next year are the projected risk pool versus the actual risk pool, and the reduction of reinsurance program funds.

As Lewis puts it, MCHO's enrollment success stems from the concept of blocking and tackling. One disadvantage of running a CO-OP is the dependency on solvency along without having additional reserves, which means there is little room for failure. If a mistake occurs, acknowledge that it happened and learn from it, he adds.

MCHO drove enrollment by focusing on attracting consumers to purchase coverage as opposed to forming its own brand. "We knew we needed to create a sense of urgency; we needed to attract enrollment in the nongroup arena," Lewis says. "Because we took steps to educate people about the enrollment opportunity, we then established ourselves as a trusted source of information; it was a tiered approach to get people in the door."

Lewis rounds out the interview by offering advice to the Centers for Medicare & Medicaid Services. Despite CO-OP struggles around the country, the agency should not close the door too early on CO-OPs. Ultimately, innovation is what drives competition in the industry and ensures plenty of choices for consumers, and it needs to continue, Lewis notes.

For more:
- here's the podcast link

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