It’s a story we know all-too-well today — a local, vital, source of health insurance is forced into shutdown because it’s losing money. But not long after Austin’s Travis County voted to shut down their money-losing Sendero Health Plan in early September, they were confronted by community outcry. Then, the reality that it was going to cost just as much to shut Sendero down as it would to keep it running.
“We heard your passion. We share your passion. And like you, each of my fellow board members is committed to making sure everyone in our community has access to quality healthcare,” Dr. Guadalupe Zamora, the chair of Central Health’s board explained at the September 22nd board meeting where they voted to keep the plan open. “I believe Sendero can do this.”
The Vote to Keep Sendero Health Insurance Austin
But making the decision to put Sendero back on the budget wasn’t an easy one. The nonprofit health insurer has increasingly lost the county money since being created by Austin’s Central Health in 2011 — last year closing the books some $33-million in the red (according to Texas Department of Insurance annual data).
Despite Sendero’s increasing debt, the insurance program has proven to be a vital community resource, providing $470-million in health coverage to 135,000 people over the past seven years.
Now, the new 2018-2019 Travis County budget has been unanimously approved for $258-million, $26-million set aside for the Sendero Health Insurance Plan which serves 24,000 Austin residents.
“With over 200,000 Travis County residents in poverty today, Sendero is the single best solution we have for providing healthcare to our most vulnerable community members,” Frank Ortega, director of District 7 of the League of United Latin American Citizens, explained to Citizens Impact.
The Next Challenge Facing Sendero Health Insurance
That being said, the budget is only part of the uphill climb facing the Sendero Health Plan in the coming fiscal year. Not only will the Austin nonprofit have to maintain its 2019 enrollment numbers with the Affordable Care Act which opens back up on November 1, 2018, but, they’re also going to have to strategically transition the sickest and most vulnerable insurance holders from the county’s Medical Access Plan to Sendero.It might sound counterintuitive, but sicker patients will actually bring the nonprofit health insurer more vital funds. Click To TweetThat’s because the ACA requires health insurance companies with healthier patients, like Sendero, to funnel some of the money sent to them by the federal government back in the form of “risk adjustment payments” which help pay for unhealthy patients on other plans.
Instead of giving up these critical funds once again, Sendero’s new strategy is to diversify the insurance pool to help keep them going through the next fiscal year and the long-term.
“If everything is perfect, we can get through to 2020 when we get a windfall from the [ACA] risk pool,” Charles Bell, who sits on the Central Health board and chairs the Sendero board, told Community Impact. But, he went on to warn, “If it’s not perfect, you’re going to hear us talking about how we can safely and responsibly wind down.”
Austin’s Sendero Gives Us National Insight
The new plan enacted by Sendero gives us an interesting look into where the insurance market stands today, but also how its evolving. Over the past few years, we’ve seen dozens of ACA co-op insurers go under due to serious lack of profitability. But, the new strategy enacted by Travis County to take on a more vulnerable pool of insurers — by actually pulling them from a different insurer in the county altogether — could prove to be not only helpful, but a profitable model.
For now, the decision to fund Sendero for the next year, alongside diversifying their insurer pool, is expected to keep Sendero afloat. The county will have a better look at it all after enrollment begins this November, as they’re hoping all 24,000 enrollees continue to seek their coverage.
But, whether or not the new strategy goes according to plan, whatever happens to Sendero in the next fiscal year will give us further insight into what’s working, and what isn’t, about health insurance in this country. Like many other counties across the United States, Austin’s Sendero Health Insurance is trying to find their viable place in the market.
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