NAIFA WASHINGTON and WAHU working for their membership!
NAIFA WA members please read the following article from the President of WAHU about a meeting we had last Monday with regards to the changes of the Premera Blue Cross/LifeWise Health Plans. Many of you wanted to know what we knew about this issue. It was a very good meeting whereby NAIFA WA and WAHU discussed the issues that our respective members had about their decision to pay no commissions for their LifeWise business. Please read.
~Sharon L. Sparling, NAIFA WA Government Relations Chair
WAHU Has Meeting with LifeWise Health Plan of Washington
Last week, WAHU Lobbyist Mel Sorensen, Immediate Past President Chris Free, and I, along with Sharon Sparling and Richard Ek of NAIFA (WA), met with the President & CEO Jim Havens and Executive Vice President & Chief Marketing Executive Jim Messina, of LifeWise Health Plan of Washington, as well as the Vice-President for Congressional & Legislative Affairs for Premera Blue Cross Len Sorrin, to review and discuss the recent announcement by LifeWise that they will be re-structuring their plans and discontinue paying commissions to Producers starting in 2016 (2017 in Clark County).
At the meeting, we expressed our appreciation for the close working relationship that has and will continue to exist between WAHU and LifeWise and Premera, both of which have a long history of sponsoring WAHU and partnering with us on various and numerous events such as our Annual Spring Symposiums. We have and will continue to work closely with Premera and other health plans on legislative and regulatory issues -- jointly working to preserve a legislative and regulatory environment that is conducive to a healthy and competitive market here in our state. It is with this constructive background and a spirit of continued cooperation that we initiated a request for the meeting with LifeWise to discuss their strategy.
We learned that LifeWise's findings show that enrollment on their plans down by about 50% since 2013, that Producers are selling Premera plans over LifeWise by a 6 to 1 margin, and, that they (LifeWise) are at a competitive disadvantage price-wise with certain other carriers in the market with no "agent sales channel" which have seen their enrollments grow.
WAHU's own findings show that the one certain other carrier referenced by LifeWise for comparison, does indeed use an agent sales channel and does indeed pay commissions when certain levels of production is reached. Nonetheless, it is LifeWise's position that these other carriers are better catering to the price-focused buyers for whom "true value" is not the major factor in their purchasing decision. So, to compete for this market share, they made a business decision to transition their plans over to an EPO (Exclusive Provider Organization) platform and eliminate Producer commissions.
As follow up to our meeting, Mr. Havens has provided the following talking points to be shared with you:
· This shift for LWWA (LifeWise) is a complimentary move to our overall Premera portfolio of offerings in the Individual marketplace
· It is imperative that Premera compete across the continuum of Value and Price with LWWA at the lower price point
· A competitive low price point requires a number of things including a commissionless structure
· Removal of producer commissions from LWWA metallic business effective 1/1/2016 with a one-time incentive offered for producers to transition green (LifeWise) business to the blue (Premera) brand
· We have extended LWWA commissions in Clark County until 1/1/2017
· All products have a broad network
· Distinctive product designs in the portfolio – shift from 2014 and 2015 strategy of similarity across brands
· All LWWA plans discontinued and move to an EPO model (in-network benefits available across AK, WA and OR) except the Essential Gold 1500 plan which will remain a PPO – member’s mapped to closest LifeWise plan
· Agents can continue to sell LWWA products and the current agent remains the agent of record
· Strictly speaking there is not increase or decrease for LWWA because all plans are being discontinued. For members who map over, they are likely to see little/no increase in premium
· No ACO products available through LWWA in 2016
· We will continue to do LWWA training and producer bulletins
· Communications to members will begin going out around late August/early September
While WAHU agreed that LifeWise's decision to bring a lower cost product to market will expand consumer choice, we disagreed that buying decisions made by consumers on price alone is always in the consumers best interests, and disagreed that eliminating compensation to their sales force with be effective in increasing LifeWise's enrollment.