UPDATED: Central Health board votes to dissolve its health care nonprofit, Sendero Health Plans, affecting thousands of enrollees

Central Health Board of Managers voted to no longer offer insurance coverage through its nonprofit health plan Sendero Health Plans Sept. 12.

Central Health Board of Managers voted to no longer offer insurance coverage through its nonprofit health plan Sendero Health Plans Sept. 12.

UPDATED 4:18 p.m.

Central Health released a statement Thursday afternoon outlining the rationale of the board of managers’ Wednesday evening vote to end Sendero Health Plans operations as well as the next steps for those covered under Sendero’s last remaining health plan, IdealCare.

Sendero had a challenging year due to required payments to a federal program known as the Affordable Care Act Risk Adjustment Program, which made offering IdealCare unsustainable, according to Central Health.

“The ACA Risk Adjustment Program is designed to compensate insurers in the marketplace whose members are sicker and require more services, which cost more. However, insurance companies with a higher number of healthier members like Sendero must pay into the Risk Adjustment Program versus receiving funds. Those payments add up to millions of dollars,” the release stated.

Earlier this year, Central Health approved an additional $26 million in funding to Sendero because it did not receive enough reimbursement through the Risk Adjustment Program.

Next steps

Central Health’s 24,000 IdealCare members will remain covered through the end of 2018, the release stated.

Open enrollment takes place from Nov. 1 to Dec. 15. Sendero will continue to offer IdealCare’s most limited plan, the Bronze Plan, through the end of 2019 should IdealCare members wish to stay with Sendero for one more year.

When open enrollment begins, members can call 2-1-1 for assistance with choosing a new plan, whether that is an IdealCare Bronze plan or a plan offered by another provider. For immediate questions, members can call 512-978-8855.

UPDATED 12:10 p.m.

Original post: 12:40 a.m.

After seven years, Travis County’s health care district, Central Health, will no longer offer any health insurance coverage through its nonprofit health care plan, Sendero Health Plans, pending approval by the Travis County Commissioner’s Court next week.

The Central Health board of managers voted Wednesday night to allocate $24 million to Sendero Health Plans in its fiscal year 2018-19 budget under the condition that the nonprofit health plan would wind down operations over the next two years.

The original draft budget allocated $20 million to Sendero Health Plans and nearly all of the discussions surrounding funding for the health plan over the past several months were held in closed session. Central Health CFO Jeff Knodel said the $20 million only covered risk-based capital through the end of 2018. The additional $4 million that the board voted to add would assist with the winding down of the program.

Board members Katrina Daniel, Shannon Jones, Sherri Greenburg and Maram Museitif voted in favor of the dissolution of Sendero, and board members Cynthia Valdez and Julie Olivier dissented. Charles Bell abstained.

Sendero Health Plans originally offered STAR Medicaid health plans, Children’s Health Insurance Plans and an Affordable Care Act plan called IdealCare. In March, Central Health announced that Sendero Health Plans would no longer offer STAR Medicaid or CHIP plans, citing insufficient premiums set by the state to cover the cost of care, affecting 18,000 members enrolled in the plan as of 2017.

The decision cast doubt over Sendero’s ACA plan IdealCare and its financial feasibility in the future.

In support of continued funding, board member Cynthia Valdez said that while ongoing threats to Affordable Care Act at the state and federal level create volatility and risk, she is hopeful that a new approach and sustained efforts to preserve the ACA will be enough to keep the program afloat.

“I do believe that there is not going to be more damage being done to the ACA and we are going to be providing our population with a good tool to serve the needy.”

Board member Shannon Jones who voted in favor of the dissolution of Sendero said he worried that the board would be making the same mistake it has made in the past by continuing to fund the program.

“We tried this for the last five years and yet find ourselves each year trying to address these issues and saying next year we’ll do better. We’ll recoup those losses,” Jones said. “My question is, if we gave it another year, would it make a difference? That same question has been asked and the answer has always been the same: It didn’t.”

Wesley Durkalski, Sendero Health Plans President and CEO, said while he appreciated the board’s hard work he wanted them to consider maintaining funding for the plan.

“I don’t have a crystal ball but chances are [the ACA] is not going away and it is the last best place to cover both the poor and the sickest among us. We’re headed down a cold road without it,” Durkalski said.

Editor's note: This post was updated to provide additional information about changes to the funding allocated to Sendero Health Plans in the FY 2018-19 proposed budget.
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