Provider-Led Health Plans Make a Comeback; AIS Newsletter Takes a Look at Their History

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As more provider-led health plans offer coverage on public exchanges, industry observers discuss the history of these insurers in the February 2015 issue of Atlantic Information Services’ Inside Health Insurance Exchanges.

Provider-led health plans (PLHPs) have a long and checkered past. But with the amount of PLHPs on the rise — for the 2015 plan year, 75 PLHPs offered coverage on public exchanges, an increase of 10 from last year, according to AIS’s Directory of Health Plans — they’re now in a position to win market share and alter the health insurance landscape, say industry observers interviewed for the February 2015 issue of Atlantic Information Services, Inc.’s Inside Health Insurance Exchanges (HEX). Others predict history will repeat itself.

Three decades ago, and again in the 1990s, hospital systems around the country began to launch their own health insurance entities, but few survived. Many of them failed because they didn’t understand what went into operating an efficient health plan, industry consultant Joe Paduda, who worked for an HMO consulting company in the 1980s, told HEX. “There was a degree of arrogance on the part of providers. And there is a real risk that providers today suffer from that same ailment,” he asserts. Another problem was that hospital executives didn’t understand the difference between patients and members, enrolling the sickest and most frequent visitors into their HMO, which created a pool of bad risk. And, unlike large health plans, they didn’t have enough funding to counter the high risk; hospital systems of years past were much smaller than they are currently. “They didn’t understand how to price [their coverage] to make sure they had sufficient resources,” Rick Corcoran, an audit partner at KPMG who works with both payers and providers, told HEX.

But a variety of factors now make PLHPs a viable option for hospital systems, namely dramatic improvements in technology, Affordable Care Act (ACA) regulations (the elimination of medical underwriting and the creation of public insurance exchanges), a financial market with low interest rates, and a health care market more comfortable with restricted provider networks. Also different is the level of health insurance experience among PLHP executives, with most having worked for one or more large health insurance companies.

Visit to read the article in its entirety and to see a table ranking the top 25 PLHPs by medical membership, including the percentage of their enrollees that came from public insurance exchanges.

About Inside Health Insurance Exchanges
Inside Health Insurance Exchanges provides hard-hitting news and strategies on public and private health insurance exchanges, written for business leaders with health plans, pharma companies, hospitals and health systems, brokers and agents, and exchange managers and vendors. The newsletter delivers reliable intelligence on this critical cornerstone of health reform — the players and their partners, product designs and enrollment results, employer perspectives and much more. Visit for more information.

About AIS
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at

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Jill Brown, Executive Editor
Atlantic Information Services
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