End of Health Plan of the Redwoods Will Leave Consumers With Fewer and More Expensive Choices
The dissolution of the Health Plan of the Redwoods, which will cease operations on Oct. 31, will leave Northern Californians with "fewer and more expensive" health plan options and will put added pressure on HMOs, health experts said yesterday at the annual meeting of the North Coast Association of Health Underwriters (Rose, Santa Rosa Press Democrat, 9/20). HPR filed for federal Chapter 11 bankruptcy protection on May 31 when faced with an $8 million budget deficit. HPR officials estimate that the health plan owes $38.7 million to creditors, which include local hospitals, physicians and other health care professionals. The HMO has about 78,000 members in Sonoma County (California Healthline, 9/11). Since HPR filed for bankruptcy, its members have been transferred to other health plans, such as Health Net and PacifiCare. However, experts warn that the rising cost of medical care and a growing elderly population will "continue to force premiums upwards and HMOs out of business," like HPR, the Press Democrat reports. Dr. Dan Lightfoot, president of the Sonoma County Medical Association, said that HPR's competitors entered the Sonoma County market by offering premium rates that could "soon increase dramatically." He predicted that employers will "react strongly" to expected premium increases averaging 25%, the Press Democrat reports. Fred Dodson, vice president of PacifiCare, agreed, saying that consumers will be faced with higher physician office visit fees, costlier premiums and higher deductibles. He also said that health plans could soon begin to eliminate medical procedures and remove certain drugs from their lists of covered medications (Santa Rosa Press Democrat, 9/20).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.