First in a two-part series.
ATLANTA — Much like
Several private exchanges working with CUs to offer healthcare policies to members report interest from credit unions and members has been mixed, if not low, since open enrollment under the Affordable Care Act began in October.
Analysts, as well as exchange and credit union executives, cite the following hurdles to greater adoption: consumers' lack of understanding of the offering; CUs preferring to be fast followers; and healthcare.gov's problems casting a negative light on all health insurance exchanges.
Industry insiders and experts agree, however, that the hurdles private exchanges have experienced so far are mostly growing pains and that the programs, in time, will take greater hold among credit unions and their members.
'Slower Than Expected'
Annette Bechtold, SVP of regulatory affairs and reform initiatives for health benefits advisory firm Digital Insurance, said she has heard from private exchanges working with credit unions that CU and member participation has been "slower than expected."
She acknowledged, though, there has been a great deal of discussion and interest among credit unions in offering the private exchanges, and also using them for their own staff. "Just not a great deal of action."
Bechtold said healthcare.gov's issues, particularly the website not working properly at the start of open enrollment, damaged the image of private exchanges, since many consumers don't see a difference between public and private programs. And, all of the advertising for healthcare.gov has most individual policy shoppers considering the federal option.
"I believe that a lot of credit unions think offering an exchange to their members, and to their own staff, is a great idea, but down the road sometime. Not many seem to want to do this tomorrow," said Bechtold.
Cornerstone Community CU in Des Moines, Iowa, liked the idea of offering healthcare to members as soon as it learned about the opportunity to offer policies through the Iowa CU League. The credit union signed on last year with the league, which, along with the Nebraska league, is partnering with the Des Moines-based CoOportunity Health, to offer an exchange that provides insurance options through a large preferred broker network.
Cornerstone Community CEO Gary Key said the $18 million CU was offering members coverage as soon as open enrollment began. "But members have been slow to enroll. It's one of those things, the concept of a health insurance exchange is new," Key said.
The $245 million Peach State FCU in Lawrenceville, Ga., is offering Credit Union Exchange Blueprint, a health insurance exchange delivered by EPL in Birmingham, Ala., a CUSO owned by 10 credit unions. Branded as Peach State Insurance Marketplace on the CU's website, the product has not drawn a lot of member attention — yet, according to EVP and COO Laura Ryll.
"I think this is because the general public does not yet understand Obamacare and this new insurance concept," said Ryll. "We think they will get there."
As the ACA March 31 enrollment deadline neared, five credit unions had signed on with EPL to offer Credit Union Exchange Blueprint and 117 members had enrolled. Bruce Clapp, EPL chief marketing and sales officer, conceded it was "challenging" in the early months of enrollment to separate healthcare.gov's problems from the performance of private exchanges.
"We had no problems and were up and running," said Clapp. "But healthcare.gov certainly cast a shadow over us. The federal program's headaches gave consumers cause for pause. So we adjusted our early expectations. Sure, we would have liked to have blown the doors off, but we are now on par with our revised forecast as business is building."
The Iowa league has signed up 46 credit unions with CoOportunity Health, a total the league is pleased with. Andrea Dickinson, ICUL member outreach coordinator, said CoOportunity Health enrolled nearly 69,000 individuals through the first week of April. "But it is not clear what role credit unions played in those numbers," she said.
CoOportunity Health stated the enrollment figures are well beyond the organization's original projections
While Iowa CU participation in the private exchange has been strong, Dickinson said she can't say the same for member enrollment.
Marathon, Not A Sprint
"Enrollment is not where we'd necessarily like to see it," said Dickinson. "But next year enrollment will be much better, when there is more consumer knowledge and understanding of the exchanges. We know this is a marathon and not a sprint."
CU Benefits Alliance in Salem, Ore., a CUSO owned by 38 credit unions, last month launched myCUexchange, a private health insurance exchange for CU members and employees. John Harris, CEO of CU Benefits Alliance and CU Insurance Alliance, said the job of the exchange, as well as participating credit unions, is to "get the word out."
The exchange was introduced in the Northwest in March, and Harris explained that a number of credit unions are working to place the healthcare option on their websites.
"When I toured the Northwest recently I got a lot of feedback from CEOs and other members of credit unions' leadership teams," said Harris. "A lot of credit unions think this is a great idea, but as far as getting them fully engaged, putting the exchange on their websites and making members aware of it is another story. They have a lot of other things on their plates."
Harris added that CUs usually like to be fast followers. "I think they are waiting to see if more credit unions will jump on board with private health insurance exchanges and see how they work out. It did not help, too, that for a while, as healthcare.gov had problems, CUs heard bad news every day about health insurance exchanges. Credit unions really don't want to put their name on something until it is proven."
Harris believes that more credit unions will eventually come on board, as does Brad Pricer, senior manager, product management at CUNA Mutual Group in Madison, Wis., who says he currently sees greater CU interest in offering a private exchange to staff.
"I wouldn't say credit unions do not see the potential to offer an exchange to members, they just are not at a place now where a lot of them feel they are ready to do so," said Pricer.
Part 2 of this series will appear at
