AlohaCare is discontinuing its main Medicare Advantage health insurance plan in 2015, a move that will affect 1,300 senior members.
The nonprofit medical insurer founded in 1994 estimates it has lost about $18.5 million since launching its AlohaCare Advantage plan in 2006 and simply cannot sustain further losses.
"We have been losing money steadily on that plan," said John McComas, chief executive officer of AlohaCare, whose other 60,000 members will not be affected. "Basically we’ve reached a point where we felt we couldn’t continue to absorb those losses. It’s just not financially feasible for us to do this."
Declining Medicare reimbursements, which typically do not cover the cost of medical services, have put a strain on health plans both locally and nationally. AlohaCare is paid a flat fee of $8,000 on average per member per year by the Centers for Medicare & Medicaid Services for the Medicare Advantage plan.
Hawaii Medical Service Association, Ohana Health Plan and UnitedHealthcare said they can’t discuss possible changes in their Medicare Advantage plans until Oct. 1. Kaiser Permanente Hawaii said there will be no significant changes to its four Medicare Advantage plans.
"We will have Akamai Advantage plans next year and will work hard to keep all of our members in the HMSA family. Unfortunately, federal law prevents us from making any statements about these plans before Oct. 1," said HMSA spokeswoman Elisa Yadao. "What we can tell you is that we value our Akamai Advantage members and consider it a privilege to serve them."
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LOSING MEDICARE
What AlohaCare Advantage members need to know about selecting a new health plan:
>> AlohaCare Advantage plan members are covered through Dec. 31. If members do not choose another plan by the year’s end, they will be automatically enrolled in original Medicare through the federal government starting Jan. 1.
>> Affected members have between Oct. 15 and Feb. 28 to choose a new health plan.
>> Members switching to original Medicare also should choose a separate Medicare Part D prescription drug plan.
>> If you would like to continue receiving care from your same doctors, make sure they participate with the health plan that you select or accept original Medicare.
>> For health plan options, members should refer to the AlohaCare letter they receive in the mail.
Source: AlohaCare
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HMSA has five Akamai Advantage plans for residents who qualify for Medicare with premiums ranging from zero to $91 per month.
UnitedHealthcare, the nation’s largest Medicare provider, announced a year ago it would eliminate certain Medicare Advantage health plans this year for nearly 4,000 members, mostly on the neighbor islands, as a result of rate reductions under President Barack Obama’s Affordable Care Act, sequestration cuts and new insurance premium taxes.
AlohaCare is on track to lose at least $4 million this year, mostly due to the Medicare Advantage plan, McComas said, adding that it will continue to offer the AlohaCare Advantage Plus plan for 400 Medicare special-needs recipients, as well as Medicaid plans for the low-income population.
"With 18 Medicare Advantage plans offering coverage in Hawaii in 2015, Hawaiians with Medicare will have a great deal of choice," said CMS spokesman Jack Cheevers. "Medicare Advantage plans come and go each year for business reasons of their own. But anyone who loses his or her Medicare Advantage plan will experience no interruption in health care coverage because they’ll automatically switch to original Medicare (managed by the federal government)."
AlohaCare said affected members will receive notices about the discontinued plan by Friday and will have until the end of February to switch to another insurance carrier or enroll directly in the traditional fee-for-service Medicare program through the federal government.
"We really wanted to be taking care of these people, except now we’re in a position that we just can’t do that," McComas said. "Our major goal is to protect our existing members and also these members that have to be transferred."
