Montana health insurer to court 10,000 Idahoans

The Helena-based cooperative says it sees a need for a new competitor in the Gem State market.

adutton@idahostatesman.comDecember 4, 2013 

Idahoans already have four insurance companies to choose from when they shop for health insurance on the state’s new exchange. Now a fifth player wants to enter the scene, making a $22 million bet that it can attract residents and their employers next year.

Montana Health CO-OP is led by a former Blue Cross of Idaho executive, Jerry Dworak.

“Being from Idaho, I knew there were only a few players in Idaho,” Dworak said in an interview Monday. “I figured a little competition wouldn’t be a bad idea.”

Dworak’s organization is a “Consumer Operated and Oriented Plan,” or co-op, a consumer-driven, nonprofit insurance program created by the Affordable Care Act as a compromise when the “public option” — a government-run insurer — was nixed from President Barack Obama’s health care reform.

The Montana Health CO-OP was among the first to receive federal seed money — $58 million in loans, much of it for reserves to cover claims — in 2012. It was licensed in Montana by the end of the year.

With co-ops taking root in just 24 states this year, the federal government asked existing co-ops to consider expanding, Dworak said. So the Montana co-op hired a consultant, who confirmed what Dworak thought: Idahoans want another player in the market.

Idaho hospitals, clinics, insurance brokers, nonprofits and employers of all sizes wrote more than 50 letters of support, he said.

Last week, the co-op closed on $22 million in no-interest and low-interest loans from the U.S. Department of Health and Human Services to fund its push.

It will be at least a year before Idahoans can comparison shop for co-op plans on the state’s exchange, Your Health Idaho. The Idaho Department of Insurance must approve the insurer, which hasn’t yet filed the paperwork to start that process.

The co-op’s target is 10,000 Idaho members its first year. Dworak told the Billings Gazette last year that he wants 40,000 customers by the co-op’s third year of operation, to make it financially viable.

This year, Your Health Idaho is dominated by not-for-profit insurers: Blue Cross of Idaho, PacificSource, Select Health, and Regence BlueShield of Idaho’s sister company, BridgeSpan.

Dworak, who was senior vice president of marketing for Blue Cross of Idaho, says the co-op is different from other insurers.

“Take a look at (other insurers’) financials and their reserves,” he said. “I don’t think the co-ops are in that mode. I think we are truly not for profit.”

Montana Health CO-OP has 18 employees. Dworak said its Idaho operation would start with four employees.

Audrey Dutton: 377-6448, Twitter: @IDS_Audrey

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