Massachusett’s revamped health insurance marketplace has proven to be a real headache. Consumers have spent hours trying to sign up for health insurance on the Massachusetts Health Connector’s problematic website and waiting for help from customer service representatives.
But just imagine how frustrating the Connector’s problems have been for Tom Policelli, chief executive of Minuteman Health. The new insurer launched just as the state’s new website went live this fall, knowing that many people would be shopping for insurance to comply with the Affordable Care Act.
A longtime insurance executive, Policelli has worked for CIGNA Healthcare, led a division at United Health Group, and co-founded Averde Health, a provider contract management company.
I talked with Policelli Friday morning about the goals of Minuteman and how they have been affected by the Connector’s slow progress. Here is our conversation, edited for length and clarity:
Why were you interested in leading Minuteman?
Policelli: Massachusetts has done a very good job covering people, but it has not done such a great job making it affordable for people to have coverage. Eastern Massachusetts in particular is a market that has just been fascinating—how broken it has been—in terms of delivering value to consumers. There is radical price differential in the marketplace. I’ve always viewed Boston as being a market with great opportunity.
What is Minuteman Health? What is the goal of the company, exactly?
Policelli: Our goal has been to be significantly cheaper than the big three—Blue Cross, Harvard Pilgrim, and Tufts Health Plan. Could we save your typical family over $1,000 per year? If you compare our metallic tier pricing to the big three, you see that we’ve done that.
Why launch at the same time as the Connector role out?
Policelli: We have targeted individual and small group [customers], just given the enrollment cycle and the big rollout that the Connector has made. But we can serve any size employer with all sorts of different products.
It’s been important for us as the new entrant to make people understand that they should comparison price. If they go shopping, they are going to see the brands that they have known for a long time, and then they are going to see we have significantly different pricing. Then, they can see if we’re the right plan for them.
We really want to be spreadsheeted. Typically, health care pricing has been very confusing, and that’s benefited most insurance companies. Pricing should be very simple, and we invite people to compare prices against the big carriers.
How are you keeping costs low? What difference will people see in what your plans offer?
Policelli: Two big inputs that go into prices are the administrative costs and the medical costs. The administrative costs are a smaller part. If you were in our offices, you would see, we are not your mahogany insurance company. We are extremely low-cost. That’s our culture.
On the medical cost side, we have focused on those higher efficiency providers. We do not have every single hospital in Boston in our network.... It’s been really taking the market and breaking it down and saying, who exactly are we looking to serve, and what do they need?
I have written a lot about the Connector’s problematic relaunch. Only a few thousand people have been able to choose their own health plan. Many more have been put in temporary coverage through the state while the Connector fixes the system. How much did your early plans for Minuteman rely on Connector business?
Policelli: Obviously it’s been very unfortunate. The bad news, as you just said, is that the number of true shoppers in the marketplace, people who can shop and close the sale, if you will, has been a lot lower than any of us have predicted. That’s been the frustration for all of us, including the Connector.
The good news is that from the very early data, about 8 to 10 percent of shoppers [are buying Minuteman plans]. When the consumer can make a decision on a plan, we’ve done well. Unfortunately, it’s been a low number of people thus far. We are looking forward to the fixes, as more and more people can sign up.
The old Connector website had a very easy-to-use price comparison tool. The new website has one but it is not as easy to find, and I think it’s not as clear. I would imagine that’s a problem for you. You’re asking customers to compare you with others and judge for themselves, right?
Policelli: The new Connector and the old Connector are very different in terms of what we can see, what looks different on the site. It’s also very different because the new Connector had much, much higher aspirations, serving different populations and with a much more complicated eligibility process... I think the Connector is as frustrated as everyone else on some of the changes, or the impact that some of those changes have had. It hasn’t worked out as all of us had hoped.
It’s a real shame. I know it will be fixed, and a lot of people are working on it. In the meantime, I think it’s very important for people to know that they still can get comparisons out there, if they go to [Health Services Administrators] website or if they go through our website.