(Austin) – The Central Health Board of Managers voted Wednesday, Jan. 24, to invest an additional $26 million in Sendero Health Plans.
Sendero is Central Health’s nonprofit, community based Health Maintenance Organization (HMO) that provides affordable health care coverage for people with low income.
“For the past six years, the Central Health Board of Managers has invested in Sendero to offer people with low income an insurance plan with more affordable premiums – one that offers high-quality health care and benefits,” said Dr. Guadalupe Zamora, Central Health Board Chair. “We believe everyone should have health care no matter where they live, where they’re from or how much they make. Having insurance makes that possible. So Sendero’s mission aligns with Central Health’s mission.”
Sendero needs additional funding because its membership grew 50 percent in 2017 compared to the previous year (from 35,000 to 53,000), and the HMO provided 40 percent more services per member.
Another reason more funding is needed is related to the Affordable Care Act (ACA) Risk Adjustment Program. The ACA Risk Adjustment Program is designed to compensate insurers in the Health Insurance Marketplace whose members are sicker and require more services – which cost more.
Sendero offers its IdealCare products through the Marketplace. In 2017, the Risk Adjustment Program did not adequately compensate Sendero to cover the services its members required.
The State’s insurance regulators require Sendero – and all licensed insurers in Texas – to submit quarterly financial reports to demonstrate they have adequate funds to remain in compliance with regulatory capital and surplus requirements. For Sendero to meet these financial requirements, it needed additional funding. That’s why the Central Health Board voted to fund $26 million from both reserves and anticipated savings.
Providing health coverage in our community
In 2017, Sendero provided health coverage for more than 53,000 individuals every month, up from 35,000 the previous year. About 75 percent of Sendero’s members are at or below 200 percent of the Federal Poverty Level. With Central Health’s support, Sendero has delivered more than $470 million in health coverage to 135,000 individuals in our community since 2012.