Medica to sell insurance in Nebraska, touting access to Mayo

Expansion plans at Minnetonka-based Medica now include Nebraska, too.

The health insurer announced on Monday its plans to sell policies for 2016 in Nebraska, with sales to individuals who buy non-group policies both on and off the government-run health insurance exchange.

Last week, Medica said it would compete in Iowa starting later this year, going up against Minnetonka-based UnitedHealthcare as another new entrant in Iowa.

As is true in Iowa, Medica in Nebraska will tout access to the Rochester-based Mayo Clinic for certain diagnoses.

"The program allows patients to receive care at Mayo Clinic with Medica providing a travel, lodging and meal stipend for the patient and a companion," the company said in a statement Monday.

Medica is entering the Iowa and Nebraska markets following significant disruption with the failure of CoOportunity Health, one of several cooperatives created under the federal Affordable Care Act to boost competition.

The coop was popular with Iowa and Nebraska consumers when it launched in late 2013. Ultimately, it failed due in part to a lack of capital, according to state regulators, with thousands of consumers having to switch to new insurance carriers earlier this year.

With this in mind, Medica will stress its track record as an insurance provider with 40 years experience, said Dannette Coleman, a senior vice president with the company.

"We're not an entity that was created out of legislation," Coleman said. "We've got stability — this is something that we've been doing for years successfully. I think the people of both Iowa and Nebraska are going to need to understand that to feel safe."

Nebraska consumers appreciate more competition, but some will be wary if Medica comes in with very low premiums, said Brian McPike, president of Compensation Programs, Inc., an insurance agency in Lincoln, Neb.

CoOportunity Health offered premiums that were substantially lower than other insurers, he said. The premiums attracted 10 times the number of enrollees expected, McPike said, but the growth contributed to the coop's financial problems.

He said of Medica: "It's good — as long as they price it correctly."

Medica has about 1.5 million members across commercial and government health insurance markets in Minnesota, North Dakota, South Dakota and Wisconsin.

Christopher Snowbeck • 612-673-4744