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.
Al Pierce
WAHU President
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