Health Plan of San Mateo Could Cease Operations in December

Continuing financial losses may force Health Plan of San Mateo, which provides coverage to an estimated 43,000 Medi-Cal beneficiaries, to cease operations in December unless the state bails out the health plan, the San Jose Mercury News reports. San Mateo County manages the Medi-Cal health plan in an effort to expand Medi-Cal beneficiaries' network of pharmacies, hospitals and doctors by providing higher reimbursement rates than traditional Medi-Cal. Michael Murray, HPSM's executive director, said that the health plan is losing about $600,000 a month and that its reserves have decreased from $32 million in fiscal year 2000-2001 to about $12 million currently. According to Murray, state contributions to the health plan have not "kept pace with medical inflation," and the plan would need an additional $8 million to keep operating after December. If the plan goes out of business, Medi-Cal beneficiaries in San Mateo County would still receive medical coverage, but they would no longer be managed by caseworkers and could have fewer doctor and hospital choices, the Mercury News reports. According to the Mercury News, health plan officials are hoping for a possible merger with, or takeover by, an insurer in Solano County. The state is unlikely to provide additional funding to HPSM until it develops a plan to help county-organized health systems statewide, Murray said (Feder Ostrov, San Jose Mercury News, 10/27).