Msc Drops 29,000 Poor From Its Rolls Eastern Washington’S Largest Medical Insurer Won’T Offer Health Plans For Low-Income Patients

(From For the Record, October 15, 1998): Staying in: Group Health Northwest has dropped out of the state’s Healthy Options program in Central Washington and plans to drop out in rural counties in Eastern Washington. The company plans to stay in the state’s Basic Health Plan in those counties. A story in Tuesday’s newspaper incorrectly reported the company’s involvement with the Basic Health Plan.

The largest health plan in Eastern Washington will stop offering government insurance to about 29,000 poor people in Spokane and Lincoln counties, many of them children.

Medical Service Corporation of Eastern Washington decided to stop offering the state’s Healthy Options plan and the Basic Health Plan next year.

MSC recently merged with Blue Cross of Washington and Alaska to form a company called Premera Blue Cross.

People who subscribe to the government plans through MSC in Eastern Washington will have to find another insurance carrier among a dwindling number of options.

State officials met with insurance company administrators Monday but failed to convince MSC to stay in the plans.

“It appears their decision is final and irreversible,” said Julie Lake, director of the state Department of Social and Health Services division that manages Healthy Options. “We’re very, very disappointed.”

“This is a significant blow to children’s health care for the community and a step backward,” said Dr. Stephen Luber, a Spokane pediatrician.

Premera Blue Cross still will offer the two government plans to about 70,000 people in 31 other Washington counties.

MSC’s decision to drop the plans was strictly a business one, company officials said.

“Continuing in this business in 1999 in Spokane and Lincoln counties, the company would lose in excess of a million dollars,” said Trae Andersen, senior vice president for Premera Blue Cross who oversees public products.

He declined to be more specific about the finances.

At the merged company’s coming-out party in August, Premera Blue Cross announced a $200,000 endowment aimed at helping the health of children and the elderly.

Healthy Options is the state’s Medicaid managed-care program. About 68 percent of the 460,000 people covered under the program in Washington are children. Most of the other members are mothers.

In Spokane County, about 30,000 people belong to Healthy Options. About 63 percent of those subscribe through MSC.

The state contracts with private insurers to provide both Healthy Options and the Basic Health Plan, the state’s managed-care plan that offers health coverage to about 225,000 low-income state residents.

About 17,650 people in Spokane County subscribe to the Basic Health Plan, and 47 percent of them are covered through MSC.

If an insurance company decides not to offer Healthy Options, it has to opt out of the Basic Health Plan because of the state’s joint contract.

People being dropped by MSC will have to enroll with another insurance company before the end of the year. They might have to change doctors, if their current doctors are not included in a new company’s plan.

For Healthy Options, people can choose from Group Health Northwest, QualMed Health Plan, Aetna U.S. Healthcare of Washington (formerly known as NYLCare) and the Community Health Plan of Washington. Those companies have said they’re willing to expand to cover more Spokane residents, Lake said.

Eight insurance providers in Spokane County will offer the Basic Health Plan next year, down from 14 this year.

The decision by MSC is only a symptom of what’s happening to the government plans. Insurance companies say the state doesn’t pay them enough to run the plans profitably.

Group Health Northwest, the second largest plan in Eastern Washington, is starting to scale back its coverage in rural counties. It dropped out of Healthy Options and the Basic Health Plan in Central Washington this year.

The company plans to stay in both plans in Spokane County, but will drop out of smaller Eastern Washington counties next year, including Lincoln, Ferry, Pend Oreille, Stevens and Whitman counties.

It’s too expensive to provide care in rural counties, said Sharon Fairchild, the interim president of Group Health Northwest.

“It’s clear the plans can’t continue to lose money on these programs,” she said. “It’s not fair to pass it along to other purchasers, like employer groups. It’s really an issue that needs to be wrestled with. We need to find some solutions at the state level.”

The 25 or so pediatricians in Spokane are worried. They plan to meet Wednesday night to talk about solutions, perhaps lobbying the state or MSC. Many of their patients are MSC and Healthy Options patients.

One-third of Dr. Chris Olson’s patients are enrolled in Healthy Options. At the beginning of every month, he receives a fixed amount of money to care for those patients, no matter what happens to them. That fee pays about half his overhead, he said.

“These are the patients who need us the most,” said Olson, president of the Pediatric Society in Spokane. “Other people who have money, they can get care. But getting care on Medicaid, that’s not easy.

“They need us. They’re in poverty, they have more problems, their families are more dysfunctional.”