An executive with Medica Health Plans, which announced May 14 it’s entering the Iowa individual insurance market, talked with the Business Record about the volatility the Minnesota company has seen – both up and down – in its other Midwest markets, and why it will shake up the Iowa individual market. Also, read some insight from a West Des Moines-based insurance broker about some unique products Medica offers – and the outlook for group offerings by Medica.

After entering the North Dakota individual market with less than a 5 percent market share a few years ago, Medica has grown its market share in that state to 20 percent, said Dannette Coleman, the company’s general manager for individual and family coverage.

Coleman says she believes the company can make the same dent in the Iowa market, which like North Dakota is similarly dominated by a Blue Cross Blue Shield company — Wellmark.   

Competition cut the other way for Medica last year, when a competitor in the Minnesota market priced policies low and Medica’s market share in the individual market plummeted from 20 percent to about 10 percent, Coleman noted.

“We are committed to growing that back, and our goal would be to surpass that,” she said.

Statewide, health insurers in Minnesota had $300 million in losses in the individual market last year.

“The individual market – whether you’re on or off the exchange – is an incredibly volatile market right now,” Coleman said. “We will be appropriately priced, because once you get upside down in this market, it’s hard to turn that around.”

Coleman said she believes the individual market nationally probably has another one to three years of instability ahead, “but we think the individual market is going to grow significantly and really be a significant part of the market.”

Coleman said her company is focused on Iowa’s individual market for now and has not considered if it will enter the group market in the state. But Rick DeBartolo, a senior vice president with LMC Insurance & Risk Management, believes Medica will likely be a player in Iowa’s group market as well.

“I would be surprised if Medica doesn’t enter the group market in Iowa,” he said. “You’re just missing so much of the market if you only do individual.”

LMC has found Medica to be an innovative company, DeBartolo said. For instance, it was among the first in the nation to roll out a private exchange option for its group plans in the Minneapolis market, and it’s an option DeBartolo hopes the company will bring to Iowa.

Additionally, DeBartolo said Medica will stand out in Iowa by offering so-called copay-based plans, in which members pay a copay for most services and procedures and are not required to meet deductibles and coinsurance for the vast majority of care.

“A lot of times, those are less expensive plans,” he said. “It’s a more consumer-driven approach to health care – I’ve seen them in other states where those types of plans are popular. That will be a real differentiator for them in Iowa – a true copay approach is going to be a differentiator for them in the Iowa market.”

Coleman said the premium difference between pre-ACA and post-ACA plans are narrowing, so it could pay for people to look at their options through the Marketplace.

“Shopping for health insurance can be really confusing,” she said. “We hope to people get out there and realize they can shop, that there are options out there.”