Medicaid insurers enter small business market

As large, brand-name health insurance companies gradually become out of reach for many small businesses trying to contain costs, insurers serving Medicaid and other government-subsidized health programs are moving into the small business market hoping to capitalize on this opportunity.

Insurance broker Bill Fields says the value proposition of the wide networks offered by "brand-name" insurers has waned because as prices skyrocket, small businesses are increasingly forced to choose the new lower-cost limited networks plans being developed by the big health plans, reports the Boston Business Journal.

Two Medicaid insurers that are expanding their core business serving the poor to offer insurance to small businesses are CeltiCare Health Plan and Neighborhood Health Plan. "I hear from people and they are clamoring for options," CeltiCare CEO Richard Lynch told BBJ. "We think we are in a spot to provide a lower cost alternative for small businesses."

In 2009, CeltiCare launched CeltiCare Direct, a commercial plan for small businesses. Looking forward, CeltiCare plans to focus on very small businesses that have seen some of the biggest price hikes. "If you focus on this segment, there is money to be made," Lynch said.

Neighborhood Health Plan doesn't think its lack of brand name hinders its ability to provide commercial healthcare. "We might not be as well-known as some other plans, but we have a strong provider network and our prices don't fluctuate as much," Neighborhood Health Plan Vice President for Business Development Carla Bettano said. The insurer has seen membership in commercial plans grow by more than 60 percent since 2008, to 49,000 from 29,000, notes the BBJ.

"I have clients that would never have considered switching to Neighborhood Health Plan three years ago, and now they are switching in droves," Fields said. He added that Neighborhood Health Plan is offering some of his business clients premiums that are 25 percent less than larger insurers such as Blue Cross Blue Shield of Massachusetts and Harvard Pilgrim.

To learn more:
- read the Boston Business Journal article

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