Medical Mutual of Ohio has decided to exit the Indianapolis market for group and individual health insurance.
This is a real blow to competition in the small group and individual health insurance market. Medical Mutual was a good carrier in the small group market, which gave a nice level of competition to the national carriers. They had plans designed that were not only unique but saved small groups money.
From an administrative standpoint, they were also very easy to deal with. They had launched their own network in Indianapolis, which started to get deep network penetration. All in all, Medical Mutual was a good alternative small group health insurance carrier.
They have stopped taking new business as of July 1st. All individual policies will end December 31st 2013 and all group health plans will end June 30th 2014. If you have an existing policy with Medical Mutual it will be business as usual. There should be no disruption in claims or administration.
If you have an individual policy with them, it may be time to start looking to move that policy. On the group side, waiting until your renewal date may be the best option. If you are not comfortable with that, then we can move you now.
Why has Medical Mutual pulled out of the Indianapolis market?
This is a decision made due to Health Care Reform under the Affordable Care Act. The smaller health insurance companies are scrambling because they don’t know what is going to happen in 2014. Under the ACA, there will no longer be underwriting, which insurance companies have used as a way to control risk since the inception of insurance. Under the new law, underwriting is taken out of the equation.
There are also some real concerns that the small group health insurance market will drop off. With guaranteed issue in the Individual market along with Federal Subsidies inside the exchange, many small companies may choose to drop coverage. It may also be a decision they are forced to make because of cost increases. We may see small group health insurance rates spike up to 50%. Very few employers will be able to absorb that kind of price increase.
The new health care laws are suppose to increase competition! As a broker, we are seeing the exact opposite. The bottom line is you still want to find the best policy in 2014. It may come from inside or outside the exchange. You may look to a fully insured health plan or a self funded group health plan. If you need help finding a plan, contact us to find the best solution for you!