From the Buffalo News:
Some 53,000 Medicaid recipients in the region, including nearly 29,000 in Erie County, will have to look for new insurance coverage this fall because BlueCross BlueShield of Western New York is withdrawing from the Medicaid managed care program.
The insurer, which plans to publicly announce its withdrawal from the program today, informed government officials of the move Thursday in a memo that was obtained by The Buffalo News.
“We have incurred losses in excess of $40 million over the past three years in these programs,” Don Ingalls, the insurer’s vice president of state and federal relations, said in the memo. “We have a 20+ year history of supporting these programs and members; however, we cannot continue to do so as the losses ultimately have been funded by other lines of business.”
The move means that Medicaid managed care recipients in Erie, Chautauqua, Cattaraugus, Orleans, Wyoming and Allegany counties will have to move to another insurance provider by Oct. 31. BlueCross BlueShield said it would notify Medicaid clients of the withdrawal by the end of August, giving them two months to make the switch.
First, I am sorry for any of you who are negatively impacted by this measure.
The Patient Protection and Affordable Care Act requires that insurance companies maintain a “medical loss ratio” of 85% for large group markets. This means that for every premium dollar, 85 cents must be paid out to medical providers. Any lower expense ratio would have to be refunded to policy holders.
So, according to this news article, Blue Cross Blue Shield (BCBS) was taking excess funds from other insurance groups and funneling into the Medicaid group. It appears that BCBS was no longer able to do this after Obamacare was implemented and so the deficiencies in the Medicaid program were exposed. Since they were no longer able to protect the insurance program for the poor from its inherent faults, they had no choice but to get out of that market.
Apparently, according to the news article, there are three other providers who do Medicaid for Western New York. Sadly, they are reporting financial difficulties with the Medicaid program as well.
New York should not allow these insurance programs to get away with it. Money should never be an issue for providing health care, particularly to the most poor and vulnerable among us. If these insurance companies must operate at a loss, so be it. Operating at a loss is no excuse.