Health Plan of the Redwoods To Shut Down at Midnight Tonight
Health Plan of the Redwoods will end operations at midnight tonight, the Santa Rosa Press Democrat reports (Rose, Santa Rosa Press Democrat, 10/31). Faced with an $8 million budget deficit since Jan. 1, HPR filed for federal Chapter 11 bankruptcy protection on May 31. HPR officials estimate that the health plan owes $38.7 million to creditors, which include local hospitals, physicians and other health care professionals. HPR officials in August announced plans to liquidate and shut down by Oct. 31 (California Healthline, 10/16). The "complete dismantling" of HPR will likely take an additional year as the health plan settles late claims and determines the amount of funds that remain to pay creditors, the Press Democrat reports. The planned HPR shutdown has forced the health plan's 78,000 members to transfer to new health plans; about 70% have transferred to Health Net of California. Most former HPR members will assume higher health care costs. In some cases, copayments for physician visits will increase from $10 to $25 and deductibles for hospital visits will increase from $100 to $500. Health insurance premiums also will rise, and many employers that covered the full cost of premiums for HPR members will shift some of the cost to employees. HPR charged an average of $200 per month for individual plans and $540 per month for family coverage, and often employees paid no part of the cost. Health Net charges $228 per month for individual plans and $671 per month for family coverage, and employees must pay at least $100 per month. Premiums for the 11,000 seniors enrolled in HPR's Medicare+Choice plan, MediPrime, will increase from $79 per month to between $100 and $250 per month under other available Medicare HMO plans, and few of those plans offer the prescription drug coverage that HPR had provided (Santa Rosa Press Democrat, 10/31).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.