Texas Mutual foray into health insurance…part 2

Last week we talked about Texas’ healthcare problems and the Texas legislature’s decision to force Texas Mutual to jump into the health insurance business.

Like you, I wondered mostly “why”…

• why force a very successful workers’ comp insurer to get into a business it knew nothing about
• why not look to other health insurers, or
• why not just expand Medicaid (like most states have)

So, I reached out to all the original sponsors of the legislation with several questions about the whys…even with four days to respond, none bothered to address my queries (one  – an office worker for James Frank (R) – responded to my email, saying he wasn’t “available to respond”).

To be clear, Texas’ healthcare problems include: 

• bad-and-getting-worse access to care…especially in rural areas;
• a quarter of working-age people don’t have health insurance; and
• healthcare affordability is among the worst in the nation.

Fortunately, the CEO of TM’s new venture was very responsive to my request for an interview.  Meredith Duncan is a highly experienced, very knowledgeable and quite forthcoming executive with decades of experience in health plan operations.

Here’s our interview.

1. MCM – Why is TXM getting into health insurance?
   The legislature created TM to help stabilize WC 30 decades ago. The passage of Texas House Bill 3752 in 2021 allowed Texas Mutual to create a subsidiary to provide health benefits coverage.  Through the creation of the subsidiary, we aim to create  additional health coverage options  for small business in TX.    Texas Mutual is a mission-driven organization, and I am excited to bring that same orientation to support small businesses in Texas.
2. What made you decide to accept this position?
   [For a] couple reasons – I’m a native Texan, and my family is as well, I got into healthcare because [some] family [members] had health issues.  I chose this role becauseI am passionate about reducing the number of uninsured in Texas… [I’m] looking to solve that so business can get coverage for employees and families…I enjoy work that requires me to build and design, so this role seemed like a great fit.
3. When do you expect to launch?
   Looking to quote new business in the first quarter of 2024 and issue policies in Q2, depending on regulatory approval.Our immediate plans are applying to the state to be a licensed stop loss carrier. Assuming we receive TDI approval, we’ll launch stop loss and self-funded plans in the first half of 2024 – using level funding mechanisms, medically underwritten…a level funded product looks like insurance but financials are trued up at end of the year… Over time, we will evaluate opportunities to enter other lines of business
4. There are several key components of any health insurance program – claims, underwriting, medical management, provider networks, compliance, policyholder service – will you be looking to handle these internally or outsource specific functions?
   For most part outsource to start – more efficient to outsource for TPA services, PBM, and technology to interface with agents, customers, providers, members…also outsourcing actuarial services for short term, underwriting we are evaluating…[it] may be either inhouse or outsourced”
5. Are there synergies [with Texas Mutual] that will be beneficial?
   Immediately [we] will keep our businesses very separate, evaluate opportunities down the road where we could support businesses together in markets outside major metro areas that are underserved.
6. You’ve been on the job for several months, what’s been the biggest surprise?
   I am impressed with the TM leadership team and having a new set of colleagues to collaborate with has been a great surprise. Second, market feedback has been very positive, in general brokers are pretty tough on payers but they have been supportive and excited about what we are designing; there’s incredible loyalty to TM on broker side.
7. What will TM will learn from group health…
   What they may find over time is keeping employees healthy and insured and making sure they have ability to get primary care, manage diabetes and MSK health will help outcomes on comp side as well…

What does this mean for you?

Spoiler alert – beware of seemingly well-intentioned legislators…