Santa Rosa Press Democrat Examines Impact of Health Plan of the Redwoods Liquidation

The decision by Health Plan of the Redwoods to end operations has "sent a ripple of uncertainty" through the Sonoma County health community, the Santa Rosa Press Democrat reports (Young, Santa Rosa Press Democrat, 8/16). 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 (California Healthline, 8/5). HPR earlier this month decided to liquidate and shut down by Oct. 31, which would leave 78,000 members of the Sonoma County health plan with only three months to find a new health insurer (California Healthline, 8/2). Many area doctors have expressed "disappointment" over the decision, and some have predicted that the HPR liquidation will lead to a physician shortage. In addition, area health care providers may have to reduce expenses or staff to cover the expected losses of millions of dollars in reimbursements owed by HPR. The HPR liquidation also will impact pharmacists, the Press Democrat reports. Pharmacist Phil Rider said, "It's not a matter of losing profit. We're not even getting paid for the raw materials." Heath care advocates have said that the failure of health plans such as HPR would result in increased health insurance premiums, which could increase demand from patients for a single-payer system (Santa Rosa Press Democrat, 8/16).

Summaries of several recent Press Democrat articles on HPR appear below:

• "SR Schools' Health Tab To Rise $7 Million": The article reports that Sonoma County schools may have to pay about $7 million more per year for health benefits for employees after HPR shuts down. The school district has opened a search for new health coverage, and according to bids from health insurers released on Wednesday, costs may increase by about 40% next year (Digitale, Santa Rosa Press Democrat, 8/15).
  
• "Health Insurance Fair Offers Seniors Aid": The article reports that state lawmakers and between 60 and 100 insurance brokers will hold an information session on Sept. 12 to help seniors enrolled in HPR find new health coverage. About 24 health insurers offer 10 different Medigap policies in Sonoma County (Rose, Santa Rosa Press Democrat, 8/12).
  
• "Kaiser's Limits": According to a Press Democrat editorial, the "fact that Kaiser [Permanente] isn't rushing to grab" former HPR members "is good news." The editorial states that the HMO "would have been hard-pressed to handle thousands of new patients" (Santa Rosa Press Democrat, 8/11).