Presbyterian Health Plan said Monday it would no longer offer individual plans on the Affordable Care Act health insurance exchange because customers are going to the doctor more often and have higher costs.
Some 10,000 New Mexico residents who received federal subsidies to buy Presbyterian insurance on healthcare.gov will now have to shop for a new carrier when open enrollment begins in November. Those patients have coverage through the end of the year, and the health plan is arranging for their doctors to take other forms of insurance so many people can continue to see the same health care providers, said Brandon Fryar, president of the health plan.
With 466,000 members statewide, Presbyterian Health Plan is a subsidiary of the nonprofit Presbyterian Healthcare Services, one of the largest companies in the state. It offers individual plans as well as Medicaid and Medicare coverage, and many of the group plans include state and local government employees.
But the health plan is expected to lose $26 million on its 26,000 individual plan members, with most of that attributed to the 10,000 patients who purchased health coverage on healthcare.gov, said Fryar. Of that number, just 1,500 live in Santa Fe County.
Under the ACA, popularly known as “Obamacare,” most people must have health insurance through an employer or an individual plan or pay a penalty. The government offers lower-income people a mix of tax credits and subsidies to reduce the cost of monthly premiums. In New Mexico, some 70 percent of those who purchase coverage from healthcare.gov receive aid, which reduces the monthly premium by more than half.
Those who qualify are above the income limit for the Medicaid program, but have low incomes and are likely self-employed or working in one or more low-wage jobs that don’t offer insurance coverage. That population has a unique set of health issues.
“We have two fundamentally different populations and behaviors,” Fryar said. Those with exchange plans have “significantly higher utilization of more services on a more frequent basis and have more complicated procedures and conditions.”
Presbyterian had put in a request to the Office of the State Superintendent of Insurance for a 35 percent premium hike to cover its losses. Now, instead of pursuing that option, it will focus on the healthier population and seek a smaller premium hike.
State Insurance Superintendent John G. Franchini is reviewing the rate requests from Presbyterian and others. Those expected to offer products on the exchange are New Mexico Health Connections, Christus Health Plan, Molina Healthcare and Blue Cross Blue Shield of New Mexico.
Blue Cross Blue Shield of New Mexico is an example of a company that pulled its individual health offerings from the healthcare.gov site last year, but is back with new plans that start in January, pending approval by the insurance superintendent.
The company also found that the exchange population, some of whom have not been in the health system for years, was more costly.
For the current plan year, 54,865 New Mexicans purchased insurance on the exchange. Some 40 percent chose an offering by Molina, a for-profit company, and 33 percent chose New Mexico Health Connections, a cooperative based in the state. Presbyterian had 20 percent of the market, about 10,000 people, while Christus had 7 percent of enrollees.
Fryar said of the 10,000 who picked Presbyterian, 2,000 did not receive federal assistance and went through the portal as a way to compare plans. Those individuals would be able to remain with Presbyterian by purchasing directly. He said another 4,000 are in regions of New Mexico where Presbyterian clinics and doctors accept insurance from other carriers.
Those most impacted are in the central Albuquerque area, where Presbyterian doctors might not accept Molina, Christus, Blue Cross Blue Shield or New Mexico Health Connections. All affected customers will receive letters this week from Presbyterian.
Date: July 11, 2016