New West Health CEO offers insight into insurer's closure

Due to marketplace challenges, Helena, Mont.-based health insurer New West Health plans to close its doors by mid-2017, reports Daily Inter Lake.

Established in 1998, the insurer will cease its Medicare Advantage coverage for 14,000 policyholders by the end of the year. Another 1,000 customers who hold Medicare supplement plans could be transferred to another insurer. In addition, New West will begin laying off 84 employees later this year.

New West CEO Angela Huschka told Daily Inter Lake the company likely won't know its total financial loss until the closure takes effect. She said the company's financial struggles began when expensive specialty drugs made it difficult to set reimbursement rates with CMS that could cover expenses, according to the article.

"We'd set rates 18 months in advance, then a new drug would enter the marketplace that a number of our members needed," Ms. Huschka said. "That set us back financially on what we originally told CMS … and we struggled with certain limits on how quickly we could recoup those losses."

She said the business ultimately became unsustainable.

Ms. Huschka told Daily Inter Lake as prices grew, New West faced some disadvantage by serving only Montana customers.

"Being Montana-based meant we've had local people on the phone answering member questions, which is great," she said, according to the article. "But [national insurers] have other lines of business to share their losses or gains with across the nation, and they can stay in business if one line of business struggles."

According to the report, once New West shutters its services, Blue Cross and Blue Shield of Montana and Humana will be the only remaining companies selling Medicare Advantage in Flathead County, where 1,500 locals use the plan.


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