(Austin) – Central Health announced Friday, March 23, that its subsidiary, Sendero Health Plans, is withdrawing from the STAR Medicaid and CHIP insurance market effective May 1.
Sendero is Central Health’s nonprofit, community-based health maintenance organization (HMO) providing quality health coverage to Travis County residents since 2012. Beginning this week, Sendero will contact health care providers and send letters to approximately 18,000 Sendero members enrolled in its STAR Medicaid and CHIP insurance plans, notifying them of the change.
“Sendero will work with the State of Texas to ensure members are taken care of and that their health coverage does not lapse,” Central Health President and CEO Mike Geeslin said. “Sendero’s STAR Medicaid and CHIP members will have the option of choosing a new health coverage plan. If they don’t choose a plan by April 13, they’ll automatically be assigned to a new plan so they will not go without health insurance.”
Without Sendero, there will be three remaining plans available to Travis County residents: BlueCross-BlueShield, Dell Children’s Health Plan, and Superior. Before making a decision, Sendero members should check with their doctor to determine whether they participate in the insurance plan being considered.
Sendero is pulling out of the STAR Medicaid and CHIP insurance market primarily because insurance premiums do not cover the cost of care. The Texas Health and Human Services Commission (HHSC) establishes and adjusts premium payment rates for Medicaid managed care organizations (MCO), such as Sendero. Under Sendero’s 2018 premium payment rate, the HMO is projecting significant losses in excess of $800,000 a month for its STAR Medicaid and CHIP insurance plans.
“The premiums paid to Sendero do not cover the projected cost of care for members,” Geeslin said. “Sendero would either have to substantially cut the rates it pays local providers or continue to lose money on its STAR Medicaid and CHIP programs. Neither option was sustainable or good for patients.”
Sendero members should call the STAR CHIP enrollment broker at 800-964-2777 to discuss their health plan options and select a new plan, or Sendero at 844-872-0537 with any questions about their current coverage and services. Assistance is available in English and Spanish, and other language support is available as needed.
Sendero’s Community Impact
In 2017, Sendero provided health coverage for more than 53,000 individuals every month, up from 35,000 the previous year. Central Health created Sendero to provide affordable, quality health insurance for people in Travis County with low income. Sendero will continue to participate in the health insurance marketplace, created by the Affordable Care Act (ACA). Since 2012, Sendero has delivered more than $470 million in health coverage to 135,000 individuals in Travis County.