Catholic Health Initiatives' interest in selling its QualChoice health insurance operations should have minimal effect on Arkansans now covered, QualChoice Health Insurance President and CEO Michael Stock said.
Stock said 155,000 Arkansans are insured by the Arkansas-domiciled company and it employs about 250. CHI, the Denver company that owns St. Vincent Health in Little Rock, revealed in its quarterly report last week that it is exploring its options and considering exiting the health insurance business.
When CHI's intentions became public last week, Stock said, he met with employees to reassure them the potential for change means little disruption for them. He had a similar message to those covered by the company directly or through employer-funded insurance policies.
"Nothing has changed for us," Stock said. "Day-to-day operations are the same. We want to continue to take care of our customers and fulfill our mission here. We have an asset that is owned by CHI, and we will do everything we can to protect that asset. If somebody else owns the asset, we'll do everything we can to protect that owner."
CHI listed losses of $97 million across seven markets in the nine months ending March 31. According to the quarterly report, the health care provider "approved a shift in strategy surrounding QualChoice Health, Inc., and decided to exit the health insurance business."
Revenue for CHI in its seven markets was $377 million.
Total revenue for QualChoice in Arkansas was over $250 million in 2015, Stock said. It reported $9.2 million in profit for QCA Health Plan but had about $5 million in losses associated with QualChoice Life and Health, which insures customers under the private option, the common name for the expansion of Medicaid approved by the Legislature in 2013.
Stock said the Arkansas business has nearly doubled within the last two years. QualChoice has picked up the bulk of its new customers from the state insurance exchange and Arkansas Works, which is to become the official name for the private option.
Last week the state requested a waiver authorizing the private option through through 2021. Stock said QualChoice intends "to be participating in that over the next five years."
QualChoice Life and Health has also been granted approval to insure residents in Nebraska and is seeking a waiver in the state of Washington.
"We've more than doubled in size since CHI acquired us," Stock said. "CHI has made sure we always have plenty of reserves to cover our policy holders. In that regard we are in very good standing. CHI has continued to support that and will continue to support that until they decided whatever they are going to do as a player in this industry. Our customers don't have anything to be worried about. We have significant reserves to take care of all policyholders for the foreseeable future and will continue to have the necessary reserves to do that."
QualChoice was founded in Arkansas in 1994. Its customer base locally is about 45 percent self-funded, 35 percent Arkansas Works and the health care exchange, and 20 percent "other risk business."
The company operates as HarvestPlains Health in Iowa, HeartlandPlains Health in Nebraska, RiverLink Health in Ohio, StableView Health in Kentucky, ClearRiver Health in Tennessee and Soundpath Health in Washington.
Even if CHI were to find a buyer, the regulatory process involved in changing ownership could take a year or more, according to the state insurance commissioner's office. Not only would the interested buyer want to investigate the financial stability of QualChoice, but the state also would similarly evaluate the potential new owner.
"CHI has hung out the for-sale sign," state Insurance Department spokesman Ryan James said. "When a buyer appears, they've got to get the right forms filed. We'll do the same level of diligence to ensure folks that are QualChoice Health customers are taken care of and company is solvent and can pay claims."
Business on 07/06/2016