A nonprofit Minnesota health insurance company hopes to fill at least part of the competitive void in Nebraska and Iowa left by the collapse of an Iowa health insurance cooperative last winter.

Medica, based in Minnetonka, will sell individual insurance policies starting Nov. 1, for coverage to begin Jan. 1, in the two states using Midlands Choice, the same health provider network that had been used by the now-closed CoOportunity Health of Des Moines.

Medica had considered Iowa and Nebraska as a natural geographic expansion of its markets in Minnesota, Wisconsin, South Dakota and North Dakota, said Dannette Coleman, senior vice president and general manager of individual and family business.

But CoOportunity’s sudden failure in December “may have had us look at the timing of the expansion differently than we would have,” she said. “Sometimes the stars align. All of a sudden there was an opportunity.”

Given CoOportunity’s closure, the stability of new insurers entering the two states is “a valid concern that people will have,” Coleman said.

“We don’t assume that we are going to come in and people will know who Medica is,” she said. “We’re a Midwestern company who’s been an insurance company for 40 years, providing coverage to over 1.5 million. We’re not new to this business. We’re not somebody who was created out of legislation. That’s how we’re hoping to differentiate ourselves.

“We are really hopeful that we will be able to come in and fill that void.”

CoOportunity was one of several insurance cooperatives authorized by the Affordable Care Act. Its finances depended in part on federal funds, which didn’t materialize when there was a shortfall between its clients’ health care costs and the premium revenue it collected.

Bruce Ramge, director of the Nebraska Department of Insurance, said the department approved Medica’s application to sell insurance in the state. Medica will submit proposed health plans to the state over the next several months.

Thomas Press, president and CEO of Midlands Choice, said Medica will be a viable addition to the insurance groups that use the network, which includes all hospitals and 97 percent of the physicians in Nebraska and Iowa.

“Medica has a long and distinguished history of being an insurance company,” Press said.

It will not sell group coverage, although the company offers group plans in its other states.

In Nebraska and Iowa, Medica will sell health plans on the Affordable Care Act marketplaces and off the marketplaces, online and through brokers. The company is looking at whether to open offices in the two states, Coleman said.

Coleman said the Medica Insure health plans, for people under 65, will have competitive prices and innovations.

For example, she said, many health plans, including some by Medica, require paying a deductible amount each year before insurance kicks in at, say, 80 percent of medical costs, leaving 20 percent to be paid by the consumer as coinsurance without knowing the total cost.

Medica also will offer a plan built around specific copayments for medical care, without deductibles and coinsurance, she said, so the consumer knows in advance what an office visit or procedure will cost.

Contact the writer: 402-444-1080, steve.jordon@owh.com

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