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Insurance plan nearly broke

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With the county's low-income insurance plan once again buckling under the weight of high health care costs and bordering on insolvency, the health professionals who oversee it are urging the state to raise its Medi-Cal reimbursement rates.

The call for help comes just three years after the Health Plan of San Mateo — which serves about 56,000 Medi-Cal, Healthy Kids and Healthy Families members — nearly shut down for the same reason, officials said Wednesday.

The plan, run on the model of an HMO, hasn't seen what should be a routine reimbursement rate increase — typically about 9 percent a year — since at least 1997 as a result of state budget woes, Health Plan Finance Director Ron Robinson said.

An incremental rate increase of 3 percent was granted during the emergency three years ago, but that hasn't been enough to offset escalating costs, Health Plan Director Mayo Altman said. “If we don't get a rate increase this year, will we close?” Altman asked rhetorically. “No, we can probably survive for another year, but just barely.”

Should the Health Plan fail, the state would take over, likely slashing the choices in doctors and services offered to members, officials said.

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With the future operation of the Health Plan hanging in the balance, local lawmakers and health professionals are pushing the state to raise monthly payments from the current average of $212 per member.

To drive their point home, Health Plan officials have met with state and local lawmakers, asking for a 14 percent increase in the state's May budget revision, Altman said.

Touting the San Mateo Health Plan as a possiblemodel for the state as it looks to expand similar managed care services, local officials point to a 2004 state legislative analyst report that says the plan saves the state and federal governments a combined $30 million a year.

“Our health plan has probably been one of the only health programs in the state that saves money, and we want the state to recognize that so that it can continue to operate,” Board of Supervisors President Jerry Hill said.

A major factor driving the Health Plan's funds shortage is that it is one of only five managed care plans in the state that mandates the enrollment of seniors and people with disabilities. Those patients typically have higher-than-average costs, compared with members in other counties, Altman said.

“We're expected to run like a business in the market place, but we're not funded like a business and have no control over our revenues,” she said.

ecarpenter@examiner.com

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