HealthNow New York said Monday it is withdrawing from the government Medicaid managed care, Child Health Plus and Family Health Plus programs in Northeastern New York at the end of April.
The decision by the Buffalo-based company, parent of Blue Cross Blue Shield of Western New York, will affect about 12,600 members in 18 counties currently served under HealthNow and Blue Shield of Northeastern New York.
It will not affect any customers in Western New York, nor does it affect the Medicare Senior Blue or commercial customers in the eastern part of the state. In all, HealthNow serves 800,000 members in Upstate New York, including 110,000 in state and federal programs.
The company made the decision after losing $12.6 million in the last three years just in government programs in the Northeastern market.
HealthNow ranks third in that region, behind MVP Health Care and Capital District Physicians Health Plan. It has a smaller medical provider network, leading to higher out-of-network costs, and lacks the clout to negotiate lower reimbursements to providers.
That's not a problem in the Buffalo-Niagara area, where it has more flexibility and negotiating power to manage costs because it is the largest insurer.
"We do not have the market size in Northeastern New York that we do in Western New York," said spokeswoman Karen Merkel-Liberatore. "We simply cannot continue to sustain the losses."
The decision also comes as HealthNow tries to reduce staff, change benefits and otherwise control costs to be more competitive with larger national insurers that are expected to enter the market in coming years.
The move affects Albany, Clinton, Columbia, Duchess, Essex, Fulton, Greene, Montgomery, Orange, Putnam, Rensselaer, Saratoga, Schenectady, Schoharie, Sullivan, Ulster, Warren and Washington counties.
Affected members in the Northeast will be moved to another plan that participates in the government programs, and should not lose benefits or coverage.
If they don't select a new plan by April 30, when HealthNow's coverage ends, they will automatically be shifted to one chosen by the state.
The company's Albany call center will serve the remaining 97,000 members in government programs statewide.