Puerto Rico's Plan: Blue licensee Triple-S seeks entry into new markets

December 1, 2008

Triple-S hopes to leverage its local market success in Puerto Rico to gain new business within the United States' growing Hispanic population

As more U.S. health insurers edge into the global market seeking growth, one Blue Shield plan is looking to compete in the United States against its familiar American cousins. Triple-S Management Corp., based in San Juan, Puerto Rico, is the Blue Shield licensee for this commonwealth of 3.9 million people.

"One of the things that makes us different is that here in Puerto Rico, we were the first insurance company to become a public company," Ramón. Ruiz-Comas, president and CEO, tells MANAGED HEALTHCARE EXECUTIVE in his office in San Juan. "When we compare Triple-S with other players here in Puerto Rico, one of our strengths is that we worked hard to prepare to become a public company and to be able to compete with other carriers in the United States. We think that position is an advantage and has helped us prepare so in the future we can serve populations outside of Puerto Rico."

Ruiz-Comas says the company is considering entering into the U.S. market with commercial, Medicaid and Medicare Advantage products, with a particular focus on Hispanic populations. According to the Pew Research Center, 14% of the U.S. population is Hispanic today, but by 2050, that percentage will more than double to 29%.

"Today this is an important population in the United States," Ruiz-Comas says. "Therefore, we might consider entering the U.S. market in areas where a high concentration of Hispanic population exists through acquisitions, joint ventures or with other Blue Cross Blue Shield plans."

Portfolio of products

Triple-S went public one year ago this month, but Ruiz-Comas says the organization had been building up to the IPO in one way or another for years, from its founding by physicians and dentists in 1959, to adopting its Blue license in 1965, to its for-profit beginnings in 2003, to its more recent streamlining efforts.

With an atypical product mix for a Blue licensee, Triple-S might at first appear to have a less lucrative book of business. A solid 34% of its 1 million covered lives are enrolled in Puerto Rico's version of Medicaid, known as Reforma de Salud de Puerto Rico or just "Reform," which is quite a bit more than other Blue plans. More than 7% of its members are enrolled in a Medicare Advantage product, and commercial business accounts for a 58% slice.

For the sake of comparison, consider insurance giant WellPoint's product mix for its 34.8 million members in 2007: just over 6% came from Medicaid and SCHIP; 3.5% came from various Medicare products; and 73% came from commercial clients.

Ruiz-Comas says the company's diversified portfolio spreads the risk of doing business in the contained geographic area of Puerto Rico, but he also notes the context of the products within the market. Coverage sources are significantly different compared to the United States.

"In Puerto Rico, total insured population represents approximately 90% of the total population," he says. "Of the total population insured, approximately 50% is Reform members. We have many Reform members because as part of our strategy, we focus to provide our members the best service and help the government in its initiatives to have a successful Reform program on the island."

Triple-S projects in its third-quarter report that its total medical enrollment will grow 4% to 4.5% in 2008, with enrollment in Medicare Advantage growing 47% to 52%.