IU Health Plans is a local insurance company owned by Indiana University Health, a non-profit healthcare system. IU Health Plans launched in 2013, offering health insurance plans to individuals, families, and employers.
IU Health had a short run with Individual health insurance plans through the ACA. They offered competitive plans with rich coverage. However, IU Health encountered significant financial losses in the individual market and was forced to discontinue them. At that time, most individual carriers also incurred losses in the Indiana individual market.
At the same time, IU health plans created employer-based health insurance products. They used their current employer-based IU Health plan as the template to offer Indiana businesses
The IU Health Plan’s network (HMO) was designed to provide care through the IU health system. To IU Health Plans’ surprise, Hoosiers don’t like being told where to go to get care.
IU Health Plans recruited seasoned Insurance professionals to help design and distribute products throughout Indiana. Plans and designs started to offer additional network access, and small group offerings were created. Small group health plans offered to employers with less than 50 employees had value.
IU’s health plan value comes from its HMO hybrid model. All care is provided through IU Health Systems, which owns IU Health Plans and controls the reimbursement rate for care.
At IU Health Plans at the peak, might have had 60K members insured under the group platform. Today, it’s reported they have 12K members insured under commercial plans.
What lead to the decline in employer participation?
IU health plans were competitively priced on their tier-one HMO network. It was not uncommon to see a 30% price reduction below the PPO market. Yet, employers were still apprehensive about offering one health system option to their employees. However, the price competitiveness quickly evaporated if the group chose IU Health’s PPO network.
IU Health created a senior product that currently insures 19K Hoosiers.
Those plans may face administration and pricing challenges with the new rules under the Inflation Reduction Act 2022.
Time will tell what Anthem decides to do with the IU acquisition. For 2025, the plans will continue to run on the IU platform, From a cost and benefits standpoint, IU Health has been a great option for Indiana’s (single-site) employers.
