Outside Medicaid Managed Care Company Attempting to Gain Foothold in Louisville


by Kenny Colston on May 14, 2012

State officials have not yet given private Medicaid operators permission to do business in the Louisville area, but that hasn’t stopped one company from trying to make inroads.

Currently, Passport Health Plan runs Medicaid in and around Louisville. The federal government has ordered the state to open the region to competition, but the area remains closed. In anticipation of a change, United Healthcare recently sent letters to dental centers in the area, encouraging them to sign up with United once the state allows outside companies to begin operations.

United officials say the letter is just preparation to serve more Kentucky patients.

“Our understanding from information in the public domain, is that the Commonwealth of Kentucky is considering a change to its Medicaid program in Region 3. If a change in the region is made and an opportunity to serve the Medicaid population becomes available to United Healthcare, we are preparing to provide Medicaid beneficiaries with the same kind of quality healthcare programs and services received by our current 360,000 United Healthcare members in the state,” Molly McMillen, United’s director of public relations, said in a statement.

State officials declined to say whether they were aware of United’s actions. Instead they say anyone anticipating more competition in the region is relying on speculation.

Tagged as: medicaid, Passport Heath Plan, United Healthcare

Towers Watson to Acquire Extend Health in Move to Expand Retiree Benefit Services

Transaction brings together Towers Watson’s benefits expertise and experience with Extend Health’s largest private Medicare exchange, allowing employers to provide a cost-effective benefit and retirees to increase plan choice and buying power

NEW YORK & SAN MATEO, Calif., May 13, 2012 (BUSINESS WIRE) — Towers Watson (NYSE, NASDAQ: TW), a global professional services company, announced today that it has signed an agreement to acquire Extend Health, Inc., which operates the largest private Medicare exchange in the United States. We believe that this combination of two market leaders will provide innovative, best-in-class health care solutions that combine specialized retiree medical transition consulting with the choice and cost advantages of individual Medicare plans purchased on a private exchange. The two organizations announced a strategic alliance last August.

The purchase price is $435 million, less net debt and certain transaction costs. We anticipate the acquisition will be dilutive to Adjusted EPS by 2% or less in year one, and then slightly accretive in year two.

Following closing, Extend Health will operate as a new business segment within Towers Watson, joining its three existing segments of Benefits, Talent and Rewards, and Risk and Financial Services. The new Exchange Solutions segment will be led by Bryce Williams, the Co-Founder and CEO of Extend Health, and will begin with more than 300 employees and an exchange that currently works with public and private sector clients, including more than 30 Fortune 500 employers and more than 200,000 retirees.

“We are delighted that Extend Health is joining Towers Watson to provide a new way of delivering benefit packages to leading organizations,” said John Haley, CEO of Towers Watson. “This agreement brings together two forward-thinking organizations with a commitment to providing market-leading solutions to our clients. The combination of Towers Watson benefits expertise and resources, and Extend Health’s proven infrastructure and scalable exchange platform, positions us well to meet the needs of employers and retirees now and in the future.”

Recent Towers Watson research(1) found that 54% of employers with more than 1,000 employees are somewhat to very likely to reconsider their current employer-sponsored plan strategy for post-65 retirees by 2015. The Extend Health solution includes proprietary exchange and decision support technology. Its solution allows retirees the opportunity to select from thousands of private Medicare plans from more than 75 national and regional insurance companies, and employers to provide access to individual coverage, typically with a defined contribution subsidy. More employers have used Extend Health than any other company to transition their retirees to a private Medicare exchange.

“This is an important time for retiree health benefits. Both companies have a strong track record of helping employers develop strategies and create programs for employee and retiree benefits,” said Bryce Williams, CEO of Extend Health. “Our complementary strengths and strategies will allow us to hit the ground running, offering clients access to a proven, powerful and scalable exchange solution today, and to improve the landscape of employee benefits going forward.”

The transaction is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in less than 60 days.

BofA Merrill Lynch is acting as financial advisor and Cadwalader, Wickersham & Taft LLP as legal advisor to Towers Watson. Morgan Stanley is acting as financial advisor and Wilson Sonsini Goodrich & Rosati as legal advisor to Extend Health.

Many GOP Lawmakers Not Moving Forward on Health Plan Exchanges

May 14, 2012 – Topic: Health Plans

Many Republican governors and state lawmakers are refusing to move forward with implementing health insurance exchanges until after the Supreme Court rules on the constitutionality of the federal health reform law, the Washington Post reports.

For example, New Jersey Gov. Chris Christie (R) on Thursday vetoed a bill from the Democrat-controlled Legislature to set up the state’s exchange. Further, in six states where the GOP controls both the governorship and the state legislature, lawmakers have not even considered measures to establish the exchanges.

About 24 states have made little progress to set up the exchanges, but many analysts and state lawmakers say the approach is “more of a political statement than a strategy with potential to derail implementation” of the overhaul, according to the Post (Aizenman, Washington Post, 5/12).

However, there have been exceptions in at least six states. Last year, Nevada Gov. Brian Sandoval (R) did not veto an exchange measure approved by the Democratic assembly, while Mississippi Gov. Phil Bryant (R) promoted exchange legislation in his state (National Journal, 5/13).

Some States Will Have Little Time To Act

Should the Supreme Court find the overhaul constitutional, states that have not moved forward with implementation on an exchange could have little time to adapt, according to the Post. In states that cannot prove they have made significant progress in setting up an exchange by Jan. 1, 2013, the federal government could establish an exchange for them (Washington Post, 5/12).

States that begin implementing an exchange after the Supreme Court issues a decision — which is expected in late June — will have about six months to pass legislation to authorize the exchange, hire a board to oversee it, find vendors to develop the technical infrastructure and have the exchange nearly operational by Jan. 1, 2013, to begin accepting customers by fall 2014 (Kliff, “Wonkblog,” Washington Post, 5/11).

Several Republican governors — including Christie and the governors of Arizona, Nebraska, New Mexico, Tennessee and Virginia — have indicated they are reticent to hand over authority to the federal government to establish an exchange in their state.

Kevin Roberts, a spokesperson for Christie, said the governor has established enough technical groundwork to move forward if the high court upholds the overhaul. “Since the beginning we’ve taken steps to maintain control at the state level,” Roberts said, noting that the state assembly could adopt an exchange bill in its fall session or Christie could use an executive order to set up the exchange.

Some Democratic governors whose efforts to set up exchanges have been blocked by Republican legislatures also are considering executive orders. For instance, Kentucky Gov. Steve Beshear (D) earlier this month said he would use an executive order if the high court upholds the overhaul. New York Gov. Andrew Cuomo (D) last month issued an executive order establishing an exchange after Senate Republicans rejected legislation to create one (Washington Post, 5/12).

Medicare Officials Recommend Against the Word ‘Exchange’

In related news, CMS officials have said the word “exchange” could create confusion for consumers and say the term should not be used in enrollment materials, Kaiser Health News reports.

CMS Office of Communications Director Julie Bataille in a meeting of outreach advisers last week did not indicate a preferred substitute but said, “Words like ‘marketplace’ resonate much more with the consumer and also tend to be something that is all inclusive.”

Bataille said “exchange” has different meanings to consumers, including the idea that they could have to swap something. She said CMS would seek public comment on the enrollment materials before making a final decision on whether to use the term “exchange” (Jaffe, Kaiser Health News, 5/11).