Sendero Health Plans “not out of the woods” yet, says Central Health

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AUSTIN (KXAN) –Monday, leaders from Central Health  (Travis County’s Healthcare District) and Sendero (the community-based nonprofit health insurance company run by Central Health) updated the public on the most recent Affordable Care Act (ACA) enrollment and on actions taken to make Sendero more financially stable during the past year.

Dozens of community members attended the meeting, many of whom had questions about Sendero’s fate and what health care offerings would be available to some of the sickest and most vulnerable people in the Austin area.

Central Health is funded by Travis County taxpayers. It provides the capital for Sendero, which is designed to help improve access to healthcare, especially for uninsured or low-income residents. Sendero was created in 2011. Since that time, Central Health has invested $108 million in Sendero.

During the course of its existence, Sendero HMO has given more than $470 million in healthcare coverage to more than 135,000 people. Sendero serves residents in Travis, Hays, Bastrop, Burnet, Lee, Caldwell, Fayette and Williamson Counties. Central Health says that around 60% of Sendero’s members live in Travis County. 

Central Health’s president and CEO, Mike Geeslin, told the meeting attendees Monday that while continuing Central Health’s investment in Sendero is a priority, the volatile insurance marketplace could alter the fate of this nonprofit health plan. 

“I need to be just blunt about where we are right now with Sendero, it’s still early in the year and we’re not out of the woods, by any stretch of the imagination,”  Geeslin said Monday. 

A previous decision in 2018 might have capped funding for Sendero in 2019, which would have likely removed it from the insurance market. But after hearing comments from more than 30 community members, Central Health’s Board voted on Sept. 22 to invest an additional $26 million in Sendero for the 2019 Fiscal Year under the conditions that the nonprofit would have to meet certain benchmarks and report back on its finances.

This action allows Sendero to continue operating for at least another year. 

To support that investment in Sendero, Central Health and Sendero have been trying to enroll more of the chronically ill individuals in the area who have been on the Medical Access Program (MAP) into Sendero’s private insurance plan. Central Health then pays the Sendero premiums for those people (who are often formerly uninsured and high-risk). In exchange for taking on more sick patients, Sendero is eligible for more money from ACA’s Risk Adjustment program. 

This allows Central Health to dip into a larger funding source through ACA to help individuals who are low-income and or very ill. This also allows Sendero to offer services to people with high health risks who have unmet health needs in the Austin area. 

Central Health said that after giving MAP recipients this option to switch to Sendero, more than 223 people agreed to make the switch. 

“These people were definitely high morbidity, unfortunately, they have very serious illnesses, they really do need a lot of services and help to get through the system, it’s not just providing the care, but giving the care to help people navigate through the system,” explained Sendero Health CEO Wesley Durkalski.

He noted that of those 223 MAP members who switched to Sendero, 98% have already “heavily accessed the healthcare system” through the Sendero network.  

Durkalski said that Sendero’s staff members feel they are making an impact by bringing this coverage to some of the most vulnerable individuals in the Austin area. 

“A lot of the employees say this has been the most rewarding experience of their careers because they are really getting a chance to match up with people who need care the most,” he said. 

Durkalski feels hopeful about this new strategy, he explained during the meeting, “we are within the range with one of the scenarios in there where we expect to break even.”

Affordable Care Act numbers

Central Health reported that in 2018,  91,158 people enrolled in ACA in Travis, Hays, Williamson, Caldwell, and Bastrop Counties. But in 2019, that number saw an 8% decrease, only 83,824 people enrolled. 

In their presentation Monday, Central Health said this decline in enrollment could be caused by a shortened enrollment period, the elimination of the individual mandate penalty, new “short term plans,” and more people having employer-based insurance. 

14,000 people (in addition to the  223 people who were previously MAP members) enrolled in Sendero through the ACA in the 2019 Fiscal Year, Central Health said.

Central Health explained that they anticipated this dip in enrollment and that changes in the ACA marketplace translated into reduced enrollment statewide. 

But the dip in enrollment forced Sendero and Central Health to talk about how to stabilize Sendero. 

Future plans for Central Health and Sendero

Central Health’s Board will have to decide how to allocate the 2020 budget between their priority areas, which include more investment in Sendero, programs for patients, health care services, and expansion in areas like Eastern Travis County. 

On June 19, the Central Health Board will take another look at Sendero’s future.

“It’s this kind of back-and-forth, like yes we’re very hopeful, we think it’s working, but at the same time the professional thing is like, well, don’t over promise, we don’t know how things will play out,” explained Wesley Durkalski, CEO of Sendero Health Plans. “But at the same time we’re very excited about operationally how it’s played out and the wins we have there, so we’re waiting to see how the financial end plays out, we’ll have a better idea of that in June.”

“As we get closer to June, we’ll have our claims data, we’ll have our actuarial opinions and we’ll be able to do a better job of coming back to you and saying, hey, here’s how we think things will play out,” Mike Geeslin, Central Health CEO, told attendees at Monday’s meeting. 

Travis County Judge Sarah Eckhardt said of Sendero back in September, “I trust you. I do not seek that this commissioners court would supplant the Central Health board … when it is simply a very difficult decision made with all good intention – to not only look good, to not only feel good but to also do good. So, if this board comes back in June and says it’s not working, I will support you.”

A spokesperson for Central Health explained that even if Sendero goes away, the people enrolled in it will not lose health coverage, they will just need to move to one of the other health insurance companies that offer coverage in Central Texas as part of the ACA. Those individuals who switched from MAP to Sendero will be allowed to re-enroll in MAP. 

Central Health’s budget for the 2019 Fiscal Year is $258.4 million. The County Commissioners approved the tax rate for Central Health that came along with that budget, the rate for the 2019 Fiscal Year is 10.5221 cents per $100 of assessed property value, which is 2% lower than the 2018 rate. But Central Health said that because of rising home valuations, “taxpayers with an average taxable homestead value of $326,895 will see a $15.67 increase (4.8 percent) on the property tax bill.”

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