On Sept. 2, Elan Solutions Inc. was approved by the Division of Banking and Insurance to write health insurance policies in the U.S. Virgin Islands, according to Omar Haedo, president of Elan, the agency that had been the exclusive general agent for Blue Cross Blue Shield in the territory.
A week later, the Division of Banking and Insurance, which operates under the Office of the Lieutenant Governor, has failed to verify its approval.
Meanwhile, V.I. Equicare, the largest independent Preferred Provider Organization (PPO) in the territory, has confirmed that ESI has been accepted as a payer in its network.
“We’re very enthusiastic about having a new carrier in town,” said Dynel Soto, Equicare executive director, in a phone interview Thursday. “It shows the V.I. is still an attractive place to do business.”
Effective Oct. 1, ESI will not only be able to write new policies, Haedo said, it will also pick up all the policies that Triple S, the umbrella under which Blue Cross-Blue shield operated in the territory, left in the lurch when it decided to pull out effective Aug. 1.
Haedo said last Friday all of the above had been approved by Banking and Insurance.
Employers, especially those with fewer than 51 employees – which are by far the majority in the USVI – that had policies in place at the time of the Triple S pullout would have been left with fewer options upon renewal.
Haedo said ESI ended up taking over all the policies, because though in its initial announcement, Triple S said they would continue to honor BCBS policies in effect after Aug. 1 until expiration, something changed, and that is why ESI was been called upon to pick up the unexpired policies.
According to Steve Baker, insurance agent and principal of Baker Magras Associates, “A month ago, they (BCBS) suddenly announced that ESI would be taking over effective Oct. 1.”
The abrupt notification has left agents in the territory scrambling to move their customers to a new company within the next 21 days, while also having received nothing at all by way of verification from Banking and Insurance confirming ESI’s official licensing.
Baker said while he trusts ESI and V.I, Equicare, “Both say they (ESI) have approval, we have not had one piece of paper from Banking and Insurance saying that.”
Furthermore, Baker said he wonders why Banking and Insurance allowed Triple S to change its mind about seeing out the policies until their normal expiration.
“They are the regulatory agency,” Baker said, musing about why Banking and Insurance allowed Triple S acting on behalf of BCBS to not honor their unexpired policies.
When CIGNA pulled out of the market, he said, they gave six months notice and honored all the policies still in effect at the time. They stopped writing new business until their expiration date even if it was after the Jan. 1 pullout date.
Carl Gotts, principal of Gotts and Associates Insurance on St. Croix, echoed Baker in regards to his trust in ESI, having also dealt with Elan in the past.
“We are going forward with placing policies as they come up,” he said, adding he had complete faith in ESI, but acknowledging that his inquiry to Banking and Insurance simply asking for verification had gone unanswered.
As for having another entity to rely on, United Health Care and MAPFRE Insurance both sell health insurance coverage to employers with two to 51 employees, but it is always good to have competition.
“While we think highly of UHC and MAPFRE, every market needs competition,” Baker said.
Elan has been in the territory for four years acting as the exclusive general agent for Blue Cross Blue Shield. ESI is the actual insurance company.
What ESI is offering, Haedo said, is “a game changer.” Companies will have the option of choosing an islands-only policy that includes services in the USVI and Puerto Rico networks, or a policy that would also cover policyholders in a network in the U.S. mainland.
But even those with islands-only policies would still have access to high quality health care facilities on the mainland where it is the best medical choice. And all people insured with ESI will have the added benefit of basic MASA (Medical Air Services Association) coverage, which covers air ambulances to and from the nearest medical facility qualified to provide needed medical services. Haedo is a partner in MASA International.
The mainland facilities and services are part of First Health Network. First Health was acquired by Aetna in 2013.
ESI has contracted with Healthsmart for the claims end of things. According to its website,
Healthsmart is “the nation’s largest independent administrator of health plans.”
Haedo explained that means Healthsmart manages and pays the claims and is reimbursed by ESI. “They take the money right out of my bank account,” Haedo said.
But Healthsmart does a bit more than pay claims, according to Haedo. They provide advocates, make all the arrangements stateside for people having to travel elsewhere for procedures, support wellness and prevention, and make claim management accessible with high end technology such as phone apps that allow policyholders to track their claims.
ESI is backed by Munich RE, one of the world’s largest reinsurance companies.
Despite that, Baker expressed some concern that ESI does not currently have a rating with A. M. Best, the insurance rating company, though he said he understood that is being worked on.
Haedo is fully capitalized, he said, and has the Banking and Insurance license in hand.
What ESI is not yet prepared to do, and what BCBS promised to do and never did, was to write individual policies.
Baker said if the U.S. Virgin Islands had an individual mandate and, therefore, could have been part of the Affordable Care Act’s insurance exchange, much of the concerns about individual health insurance policies “go away.”
“Exchanges give you more choice,” Baker said. Though the premiums would be the same, people with incomes under $47,000 would be eligible for big federal tax subsidies. With a high poverty rate and 30,000 people not covered in the territory that, Baker said, is a big deal.
The individual mandate was not made available to the U.S. territories when Congress finally fashioned the ACA legislation.
Haedo said ESI hopes to eventually be able to offer individual coverage. Meanwhile, it will cover a husband and wife owned sole proprietorship if they both work for the company.
Repeated calls to Gwendolyn Brady, director of Banking and Insurance, and Lt. Gov. Osbert Potter for verification and comment on the new insurance company since last Friday have not been returned.