HAP’s purchase of Midwest Health Plan is expected to pay dividends

The Medicaid HMO market is getting ready for dramatic change with the addition of more than 800,000 projected new members in 2014 when the federal government lowers Medicaid income eligibility requirements. The Michigan Chronicle Newspaper sat down with industry veteran William R. Alvin, president and CEO of Health Alliance Plan (HAP) and executive vice president of Henry Ford Health System to discuss what’s ahead for the 500,000-member health plan in the coming year.

William Alvin at Southfield lobby openingMichigan Medicaid is expected to increase 25 to 40 percent with the full implementation of the Affordable Care Act in 2014. Companies, like Health Alliance Plan, are making plans to address the complex and growing consumer needs associated with the seismic increase in eligible recipients.

The challenge according to industry insiders is to strengthen the program now so that in 2014, when up to 800,000 new enrollees join the Medicaid program, they obtain access to quality care and not just a card that does not provide access to needed care.

HAP is hoping to accelerate its readiness plans with its purchase of the 75,000-member Midwest Health Plan, recognized as one of the top Medicaid insurers nationwide.

The move will help HAP and Midwest Health Plan vie in the expanding Medicaid market.

With coming health care reforms, Medicaid will see a furious pace of growth without a lot of overhead, according to industry sources. The House Fiscal Agency reports that Medicaid spending has risen more than 125 percent since 2000.

Many insurers, facing declining enrollment created by company downsizing and business closures nationwide, are opting to increase market share by entering the flourishing Medicaid HMO market.


But there are already reported bumps in the road.

Proposed cuts in Medicaid and taxes on health care insurance claims by the Snyder administration may diminish profit projections. Notwithstanding, there’s a specific advantage to insurers operating with a pre-set rate (the state pays Medicaid plans) and automatic member assignment, notes one insider.

“Profit margins will always be a challenge,” notes William R. Alvin, president and CEO of Health Alliance Plan (HAP) and executive vice president of Henry Ford Health System. “Ever-present market pressures — from diminished government funding and employer-driven demands to decrease rates to other market-driven demands — must be offset by reduced administrative expense and improved efficiency in the delivery of care, which our company is known for. HAP is well-prepared to address these challenges,” according to Alvin.

A part of HAP’s model rests on understanding and serving the health needs of its diverse membership base, which is comprised of substantial numbers of Hispanic, Arab and African American members.

Many of its plans promote prevention and wellness through early intervention, health engagement programs and incentives to maintain healthy lifestyles.

“HAP physicians bring unique understanding of the cultural issues that often impede patient care,” according to a HAP spokesperson. “And our combined knowledge helps us place more focus on preventive efforts and chronic conditions like Type 2 diabetes.


Michigan is moving toward more efficient health care models that increase reliance on Medicaid managed care, reducing uninsured hospital visits, moving long-term care toward community-based care models and streamlining enrollment procedures and incentive-based Medicaid Electronic Health Record (EHR) certification and incentive programs.

HAP was rated “Highest in Member Satisfaction among Commercial Health Plans in Michigan” for the fourth consecutive year, according to the J.D. Power and Associates 2011 U.S. Member Health Insurance Plan Study for its leadership in quality care and benchmark customer satisfaction. HAP also has been recognized as an industry leader for its early assimilation of more efficient administrative processes.


The expansion will allow companies, like HAP, to increase access to health services for a growing number of Medicaid-eligible Michigan residents, while providing members with easy transitions with shifts in program eligibility.

The strategic grouping of commercial, Medicare, Medicaid and individual product capabilities will become increasingly important as we move toward the major impacts of health care reform legislation in 2014.


The intended purchase of Midwest Health Plan represents a forward-thinking strategic partnership between two highly-respected Michigan-based companies, according to Alvin.

“HAP is strong on the commercial, Medicare and individual markets, whereas MHP’s strength is in Medicaid, MIChild and dual eligibles who currently qualify for both Medicare and Medicaid coverage,” notes Alvin.

MHP’s experience, track record and recognition as the 14th best Medicaid Health Plan by U.S. News and World Report, makes for a well-suited marriage between the two industry leading insurers.

HAP intends to maintain MHP as a separate, wholly-owned subsidiary under the same name in its Dearborn headquarters.

“I feel a faithfulness to my employees who favored a Michigan-based partner,” says Dr. Mark Saffer, the founder and president of Midwest Health Plan. “I felt (HAP) was a great choice.”

The two companies are expected to make continued improvements aimed at stabilizing what has been a challenging path toward improved healthcare.

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