CT's newest health insurer Tufts eyes growth in state's Medicare Advantage market

HBJ Photo | Bill Morgan Marc Hudak is leading Tufts Health Plan into Connecticut's Medicare Advantage market through its joint venture with Hartford HealthCare, called Care Partners of Connecticut.

Dr. James Cardon, Chief Clinical Integration Officer, Hartford HealthCare and CEO, Integrated Care Partners

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By Matt Pilon

In Connecticut, a handful of insurers can claim the majority of customers in the fast-growing Medicare Advantage insurance market, but a new player is hoping to grab its piece of the pie.

Care Partners of Connecticut, a newly formed joint venture between Hartford HealthCare and Massachusetts-based Tufts Health Plan, plans to sell Medicare Advantage plans that would take effect early next year, pending federal approval.

An increasing number of Medicare beneficiaries both in Connecticut and nationwide are opting to purchase Medicare Advantage policies, which typically provide supplemental vision, hearing, dental and drug benefits to people ages 65 and older. And as the state's population grays, several experts project significant growth in Medicare Advantage over the next decade, which will set off a market-share battle.

In an interview this month at his Newington office, Care Partners' recently named President Marc Hudak said Tufts and Hartford HealthCare are ready to fight for that business.

“You've got more people becoming eligible, you've got more people saying 'I want a different kind of plan,' ” Hudak said. “So it's a large and growing market.”

Care Partners will be up against market leaders UnitedHealth Group, ConnectiCare and Aetna, which collectively owned 81 percent of Medicare Advantage policies in Connecticut as of last year, according to the Kaiser Family Foundation. But Tufts is a well-known name in Medicare and should be able to compete, said Andrew Kadar, a managing director of global consultancy L.E.K. Consulting.

“Tufts in particular is a very high-performing plan,” said Kadar, who focuses on healthcare consulting.

Tufts' Medicare Advantage plans are among a small minority around the country that have received the highest possible quality rating from the Centers for Medicare and Medicaid Services. It also has 98,000 enrolled customers, which is a relatively large number.

If done right, Medicare Advantage plans can be more profitable than other types of health insurance, Kadar said, because there is more money per member in play.

“It can be a little scary if you're not going to do it well,” he added.

Dual recruiting

Hudak has his work cut out for him in the coming months as Medicare's open enrollment period approaches in October. He will be working to recruit both customers and providers to join the Care Partners plan.

Care Partners is technically starting from scratch in customer enrollment, but it can leverage Hartford HealthCare's patient relationships to accelerate the process. More than one-third of Hartford HealthCare's patient revenue in fiscal year 2016 came from Medicare.

Hudak said Medicare Advantage patients switch insurers fairly often, compared to other types of health insurance customers, so he sees poaching opportunity.

Once Care Partners receives federal approval, there will be a heavier marketing push. It plans to sell policies directly to consumers and through insurance brokers.

On the provider side, Hudak has been working with Dr. James Cardon, Hartford HealthCare's chief clinical integration officer and CEO of the system's Integrated Care Partners, to recruit doctors to the Medicare Advantage plan.

Hartford HealthCare has six (soon to be seven) acute-care hospitals around the state, more than 19,000 doctors and other employees, and includes rehabilitation, senior and home services units. One might assume Hartford HealthCare would want to be the sole provider of health services in the new arrangement, but that's not the case.

An insurance company needs a big network to attract customers, Hudak said.

“People shopping want to know if their primary care physician is in the network, and if their drug is on the formulary,” he said.

To entice doctors to join, Care Partners is touting Tufts' five-star CMS rating and its intention to focus on streamlining and limiting as much as possible its “prior authorization” process — in which insurers must first approve a health procedure or service before it is performed.

“It creates frustration and delay in care,” Hudak said. “It's not a good experience for customers or providers.”

In a competitive market, Cardon said Care Partners is going to have to stand out to succeed.

“We're going to have to clearly differentiate ourselves as we move forward,” Cardon said. “If we're just another plan in the marketplace, in my experience, it's not going to work.”

The joint venture also represents new ground for Hartford HealthCare, which is taking on financial risk as part-owner of an insurance plan.

It follows in line with the gradual shift Hartford HealthCare and other providers have made in recent years away from fee-for-service health care toward a model that aims to better manage patient health and keep people out of the emergency room and doctor's office.

While the provider-sponsored health plan model is rare in Connecticut, it is more common in some other states, like California, Pennsylvania, New York and Minnesota.

It's Tufts' second such arrangement. The first, announced in 2015 in New Hampshire — also a new state for Tufts at the time — is selling group health policies through a joint venture with Granite Health called Freedom Health Plan. Today, it has about 30,000 members, Tufts said.

Medicare Advantage's horizon

While Connecticut's Medicare-eligible population is growing, so too is the portion of that population paying for a Medicare Advantage plan.

In Connecticut, nearly 180,000 Medicare patients — about 30 percent of the total — are enrolled in a Medicare Advantage policy, up from 15 percent a decade ago, according to Kaiser Family Foundation.

L.E.K.'s Kadar co-authored a paper late last year projecting that the growth won't be stopping anytime soon.

The rising cost of health care is playing a big role, as standard Medicare requires beneficiaries to pay 20 percent coinsurance, Kadar said.

“As healthcare costs increase every year, that 20 percent is becoming scarier,” he said.