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BlueCross BlueShield reverses its decision to exit Medicaid and Child Health Plus

BlueCross BlueShield of Western New York no longer plans to exit the Medicaid and Child Health Plus managed care programs, the insurer announced Wednesday.

The reversal means the insurer’s 53,000 Medicaid and Child Health Plus clients in the region – including about 29,000 in Erie County – don’t have to worry about switching their coverage to another health insurance company this year.

BlueCross BlueShield had cited steep financial losses in the Medicaid program in announcing its intentions in July. The insurer said that it changed its mind because it is in discussions with another entity, which it declined to identify, to administer its Medicaid managed care program through a strategic partnership, according to a statement issued Wednesday.

BlueCross BlueShield said that it has notified the state Department of Health of its decision to put on hold its withdrawal plans, though it is not accepting new members in the programs. The insurer said that it will provide further updates as soon as possible and members with questions can call customer service at (866) 231-0847.

In July, BlueCross BlueShield had announced its intention to withdraw from the Medicaid managed care program, effective Oct. 31. The insurer said at the time that it would notify its Medicaid clients of its plans by the end of August, giving the members two months to switch to another insurance company.

The company cited losses of more than $40 million over the last three years in the programs, blamed on underfunding by New York State, and said it couldn’t continue to cover the losses in the managed Medicaid and Child Health Plus programs through other lines of business. BlueCross BlueShield had promised to work with the Health Department to make sure the transition went smoothly for its clients.

The insurer never sent out the required 60-day notices to members because, shortly after the July announcement, the unnamed entity reached out to BlueCross BlueShield expressing interest in a strategic alliance. The BlueCross BlueShield statement said the entity provides coverage to people in government-sponsored programs but did not elaborate.

BlueCross BlueShield provides Medicaid and Child Health Plus managed care in Erie, Cattaraugus, Chautauqua, Orleans, Wyoming and Allegany counties.

The insurer is the fourth-largest provider of Medicaid managed care in Erie County, with a 19 percent market share. Independent Health, at 29 percent, has the largest share, while Univera Healthcare has 27 percent and Fidelis Care has 25 percent.

BlueCross BlueShield terminated its Medicaid managed care program in Niagara and Genesee counties in 2013 and its programs in northeastern New York seven years ago.