by James T. Mulder
October 14, 2013
Excellus BlueCross BlueShield is dropping out of public health insurance programs for the poor and the disabled in a move that will affect more than 22,000 Central New Yorkers.
The insurer notified doctors and other providers it is withdrawing "with great reluctance" from the Medicaid managed care and Family Health Plus programs because it expects to lose about $100 million on those programs this year.
"We've been scrambling to protect our customers and make sure they continue to have access to health care and their providers," said George Dooher, an assistant commissioner of the Onondaga County Department of Social Services.
He said the state Health Department is developing a plan to move affected individuals into other participating plans. "We are hoping the transition is smooth so our customers can retain their current medical providers - that's the key," Dooher said.
Health Department officials were not immediately available for comment.
Onondaga has three other insurers that provide Medicaid managed care: Fidelis Care, Total Care and United Healthcare. Fidelis and United Healthcare also participate in Madison, Cayuga and Oswego counties.
Medicaid, funded by the federal and state governments, pays for health care for people with low income and disabilities. Nearly all people on Medicaid in Central New York are enrolled in Medicaid managed care plans. The state, which administers Medicaid, contracts with private insurers to run these plans. They coordinate care for members who see doctors and other providers in their networks. The plans are paid a fixed amount per enrollee. There are nearly 100,000 people in Onondaga, Oswego, Madison and Cayuga counties enrolled in Medicaid managed care; 22,468 of them are in the Excellus plan.
Family Health Plus is a public health insurance program similar to Medicaid for adults who are ages 19 to 64 who have income too high to qualify for Medicaid. That program is being eliminated next year as a result of federal health reform and most people enrolled in it will go into Medicaid. There are 2,820 people in Central New York in the Excellus Family Health Plus plan.
Excellus will pull out of Medicaid and Family Health Plus Jan. 1 in Oswego County and on April 1 in Onondaga, Madison and Cayuga counties. It will also discontinue these programs in 21 other counties across upstate New York.
In its letter to providers, Excellus said the state is not willing to increase reimbursements to offset its losses. " ... we would like to stay in the Medicaid Managed Care and Family Health Plus programs, but it is not sustainable without a significant reduction in the losses we are incurring," the letter said.
Excellus made a profit of $106 million in 2012.
The company said it will continue to participate in the state's Child Health Plus program and the federal Medicare program.
George Chapman, a Syracuse health care consultant who works with doctors and hospitals, said Medicaid managed care is a very small part of Excellus' business. "If you don't have the bodies, you can't make any money," he said.
Fidelis and Total Care combined control nearly 70 percent of the Medicaid managed care market in Onondaga County. Chapman said Excellus' strength is selling insurance to groups and companies, while plans like Fidelis and Total Care focus on selling to individuals.
Rev. Patrick J. Frawley, president and CEO of Fidelis, a statewide Catholic health plan, said Fidelis operates in 22 of the 25 counties Excellus is leaving and has applied to operate in the other three counties: Jefferson, Seneca and Yates. He said Fidelis will work with the state to help make the transition for affected Excellus members "as seamless as possible."
Excellus will leave Medicaid at the same time New York expands the public health insurance program to comply with the federal Affordable Care Act, also known as Obamacare. To qualify for Medicaid, a single adult without dependent children cannot currently have annual income of more than about $11,000. Beginning Jan. 1, that income limit will increase to just under $16,000 for individuals ages 19 to 64.