City of Pittsburgh employees and their family members will soon have a choice of health insurers -- and guaranteed access to UPMC hospitals, according to the president of the firefighters union.
Joe King, head of International Association of Fire Fighters Local 1, said Highmark Inc. and HealthAmerica will be offering plans to the city's 3,400 employees and their immediate relatives, totaling about 7,900 "covered lives."
For the last five years, Highmark Inc. had been the city's exclusive health carrier, giving them the city's entire book of business. The new multicarrier agreement, running 2014 through 2016, means Highmark seems sure to lose at least some of its customer load to HealthAmerica, a division of Coventry Health, which was purchased last year by health insurance giant Aetna for $7.3 billion.
"We are going back to a choice of carriers," Mr. King said. "We don't want our families involved in the middle of this fight," speaking of the ongoing grudge match between Highmark and UPMC.
The multicarrier agreement was important, he said, because HealthAmerica has access to UPMC hospitals and doctors into 2015. Highmark, on the other hand, does not -- UPMC says it doesn't want to sign a new access agreement with Highmark, because Highmark is assembling its own health system, the Allegheny Health Network.
The current contract between the two expires at the end of 2014, and after that -- barring a new agreement -- many Highmark customers won't have in-network access to most UPMC facilities.
The multicarrier arrangement isn't unusual -- many employers offer coverage options through multiple health insurance companies, and prior to 2008, the City of Pittsburgh did too.
But that year, Mayor Luke Ravenstahl's administration decided to go with a single provider, Highmark. The three-year contract would save the city $17 million over the duration, the mayor's office said at the time, because the Pittsburgh insurer offered a pricing discount in exchange for the guaranteed book of business.
The city's health benefits contract again came up for bid in 2010, for the three-year period running from 2011 through 2013, and Highmark again was awarded an exclusive contract.
But this time around, Highmark's fractured relationship with UPMC complicated the renewal. Two months ago, Judy Hill Finegan, director of the city's Personnel and Civil Service Commission, said that the city had received four bids, and that all of the bidders were asked whether they'd be open to a multicarrier arrangement.
Ms. Hill Finegan was not available to discuss the city's health plan Wednesday, but Mr. King said Ms. Hill Finegan was "very headstrong on going to a choice of carriers, because of this fight" between Highmark and UPMC.
In addition to Highmark and UPMC, Mr. King said Cigna and UnitedHealth also submitted bids, which ultimately were rejected. Notably, UPMC Health Plan did not bid, saying at the time that tensions with the city and its mayor meant "we did not believe we could get a fair shake from the current administration."
Highmark and HealthAmerica officials did not comment on the new arrangement. Paul Wood, UPMC spokesman, did, saying that this is "exactly what we know will happen when employers offer [an] option other than just Highmark."
Mr. King said the new arrangement should save the city $4 million or $5 million a year, and that health plan orientation programs with city employees are underway. The "open enrollment" period for city employees -- during which time they can switch carriers or otherwise amend their benefits plans -- begins Oct. 1.neigh_city - businessnews
Bill Toland: email@example.com or 412-263-2625.