After two years as the sole health insurance provider on the Affordable Care Act market in Southeastern Pennsylvania, Independence Health Group faces new competition next year, according to preliminary rate filings published Monday by the Pennsylvania Department of Insurance.
Pennsylvania Health & Wellness Inc., a unit of publicly traded Centene Corp. of St. Louis, will offer five HMO plans in Bucks, Montgomery, and Philadelphia Counties. Geisinger Health Plan, owned by the nonprofit Geisinger Health System of Danville, Pa., is offering seven HMO and preferred-provider plans in those three counties, plus Chester and Delaware Counties.
Independence, the region's largest health insurer, will remain in the five-county market with 11 plans. The Philadelphia company's average increase for its Keystone Health Plan East HMO plans is 2.6 percent, with changes ranging from a 0.8 percent reduction to a 4 percent increase. For Independence's Personal Choice plans, the changes range from a 2 percent reduction to a 3.3 percent increase, for a flat average.
The statewide average rate increase request was just 0.7 percent. Final rates will be announced in the fall.
"These rate filings overall show that Pennsylvania has a healthy and competitive health insurance market," Insurance Commissioner Jessica Altman told reporters during a conference call.
The average requested increase for 2019 is far below the 30.6 percent average increase approved by regulators for this year's plans. The big increases approved for this year were, however, reduced significantly for many consumers by income-based subsidies. At Independence, for example, more than 75,000 customers have no monthly premium this year because of the way subsidies worked.
Brian Lobley, president of commercial and consumer markets at Independence, cautioned that because of the way subsidies are calculated, the presence of new insurers in the market could result in a replay of 2015.
"Even though the rate increases on the surface didn't seem that large, the out-of-pocket premium impact to members was really, really large. That's our going-in concern for 2019," he said.
In general, though, Lobley said, Independence welcomed the new competition, "because we think that will lead to a more long-lasting, stable market for consumers."
Notably absent from the ACA exchange market in Southeastern Pennsylvania is UPMC Health Plan, which has a joint venture with Tower Health to sell commercial health insurance across much of the region.
"What will be interesting to see is which providers Centene and Geisinger partner with, in terms of network development, in Southeastern Pennsylvania and the Philadelphia market," said Tyler Dinwiddie, a market analyst with Decision Resources Group, a health-care analytics firm.
Geisinger and Centene said it was too early for them to provide any information on their networks of doctors and hospitals that consumers will be able to use under their insurance plans.
"We feel confident that there are some provider organizations and health-care systems in the Philadelphia market that are aligned with our values," said Chis Fanning, chief sales and marketing officer at Geisinger, which sells insurance in 43 counties, not counting the five in the Philadelphia region. It is not expanding in other parts of the state next year.
A spokesman for Centene's Pennsylvania Health & Wellness declined to discuss why the company only plans to sell plans in Bucks, Montgomery, and Philadelphia Counties. Starting in January, the company will manage long-term services and supports for Medicaid beneficiaries in all five counties.