GRAND RAPIDS — A deal with a business unit of national commercial health insurance carrier Cigna Corp. enables Priority Health to offer employers with employees outside of Michigan a far broader care network.
Under the agreement with Cigna Payer Solutions, Priority Health members outside of Michigan can use Cigna’s U.S. PPO care network that includes nearly 1 million care providers and 6,300 hospitals.
“Priority Health members already know that they get coverage from coast to coast in the state of Michigan,” Priority Health CEO Joan Budden said. “Now, as a result of this agreement with Cigna Payer Solutions, we’re offering a better and more seamless experience for our members who live, work or travel out of state as well.”
Priority Health and Cigna Payer Solutions, which works with health plans and third-party benefits administrators across the country, continue to work out details of the deal that’s expected to take effect this fall.
The arrangement will primarily benefit employers based in Michigan who have satellite offices and employees in other states. The coverage goes across all of Priority Health’s commercial policies: HMO, PPO, self-funded and fully insured.
“As Priority Health continues to grow, we’re working with more employers who are also expanding their business here in Michigan and across the country, and this new agreement will allow us to meet the needs of our existing customers and be a partner to those that we don’t have today,” said Megan Schmidt, vice president of sales and client services for Priority Health’s commercial markets.
“This just allows greater access to a provider and a very robust network when they’re living outside (of Michigan) or traveling,” she said. “It really opens up that opportunity for someone that didn’t think Priority Health was a solution for employers that have (a presence in) multiple states or had employees living outside of the state.”
The second-largest health plan based in Michigan, Priority Health has nearly 800,000 members enrolled in policies across all product lines and provides health coverage to 1,200 employers in the state. The Cigna coverage also works for members with dependents living outside Michigan, such as college students.
The deal with Cigna results from growing client demands for a better national care network, Schmidt said.
Out-of-state care access is a “significant selling point for us today,” Schmidt said. She estimates that about 10 percent of Priority Health’s members enrolled in commercial policies reside outside of Michigan, and “it’s an area that certainly continues to grow” with a “substantial amount of employers that are continuing to expand their operations out of state.”
“It’s certainly an opportunity, and one that we’re hearing from employers that they want,” Schmidt said. “It’s an important decision-making point when they’re looking at a health insurance carrier to make sure that the access is there.
“Access is always at every conversation that we’re having with an employer.”
The Grand Rapids-based health plan, majority- owned by Spectrum Health, started the arrangement with Cigna for commercial policies to address an immediate need, Schmidt said. Priority Health may expand it to individual, Medicare and Medicaid coverage in the future, she said.
“Obviously, having access to a national network such as the Cigna Payer Solutions could be viable for those other products as well,” Schmidt said.
Until now, Priority Health covered out-of-state members through an existing contract with Waltham, Mass.-based Private Health Care Systems, which has a care network of about 500,000 providers.
The health plan will maintain the contract with Private Health Care Systems for employers that want to keep it in place, while offering the more-robust Cigna network that comes with deeper discounts.
Signing a deal to offer Cigna’s network should make Priority Health more appealing to Michigan employers with locations and employees based elsewhere and enable the insurer to better compete for that business, said Jerry Konal, a senior consultant in health and benefits at Willis Towers Watson PLC’s Southfield office.
Priority Health’s out-of-state care network “certainly has cost them a win here and there over time,” Konal said.
“Now they have a much broader network and competitive discounts,” he said. “This adds a nice element of network access.”