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Cook County Health puts brakes on plan to sell HMO on Obamacare exchange

Friday, August 15, 2014
Crain's Chicago Business
by Kristen Schorsch

The Cook County Health and Hospitals System is shelving plans for at least a year to sell an HMO product on the Illinois health insurance exchange.
Steven Glass, who oversees managed care for the large public health system, said the two-hospital network has been focusing on its CountyCare managed care program, which is coordinating the care of about 100,000 Medicaid patients to keep them healthy while lowering medical costs. That number is expected to double as the Quinn administration mandates that half of the state's roughly 3 million Medicaid recipients enroll in a managed care plan of some form by year-end.
Cook County Health previously planned to sell an HMO product for the enrollment period that begins Nov. 15, the second year of the exchanges nationwide created under the Affordable Care Act. Instead, the health system is eyeing 2016, Mr. Glass said.
“It became just so apparent once we really understood the state's implementation and the state's process for moving toward managed care that that had to be our focus,” Mr. Glass said.
Cook County Health is among the largest public health systems in the country, with a roughly $1 billion budget, and it treats a predominantly poor and uninsured population. The system includes John H. Stroger Jr. Hospital on the Near West Side, Provident Hospital on the South Side and several clinics.
In 2013, former Cook County Health CEO Dr. Ramanathan Raju said he wanted to sell an insurance product on the state exchange. Selling insurance and launching CountyCare in 2012 were two of Dr. Raju's ambitious ideas to help the health system become more financially independent and rely less on taxpayers to stay afloat.
Many CountyCare enrollees are insured for the first time, which means Cook County Health is getting paid for their treatment instead of having to subsidize it as charity care. But costs have climbed quickly, as newly insured patients have sought everything from checkups to pricey treatment for chronic ailments.
Dr. Raju left the health system in March to lead the New York City Health & Hospitals Corp., where he was chief operating officer before coming to Cook County Health in 2011 as CEO.
One barrier for Cook County to sell an HMO health plan was removed earlier this year, when the state broadened the definition of an organization that can operate an HMO to include a “unit of local government health system” operating in a county with at least 3 million residents. Previously, only insurance companies, nonprofits that were doing business only as HMOs and the University of Illinois Hospital could operate an HMO.
The deadline to submit proposed plans to sell on the exchange had already passed before the law expanded what entities could operate an HMO.
Cook County Health has yet to apply for an HMO license with the Illinois Department of Insurance, Mr. Glass said.

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