Wadena County Commissioners approved withdrawing from their county-based health plan, South Country Health Alliance (SCHA), Friday night, noting unsustainable costs and unknowns about the program's future.
The decision came after commissioners Bill Stearns and Sheldon Monson attended an executive committee meeting with SCHA earlier this week, which reportedly showed the county would likely have to make a $1.4 million cash-call payment to keep the program operational. That was a small piece of the $16.8 million cash call expected to go out to the 11 counties in the region, but it was considerably more than the $850,000 commissioner Stearns estimated the county might have to pay in December 2018. The $16.8 million was derived as 210 percent of the risk-based capital, the minimum amount of capital appropriate for a reporting entity to support its overall business operations in consideration of its size and risk profile.
The reasons for the shortfall came as medical claims were nearly 5 percent over budget, DHS revenue was down 4.1 percent; total revenue for the program was down 3.7 percent and; overall, there was a $14.8 million net loss. Commissioners said those losses could be attributed to a lower amount of members and high cost claims. Monson said a better economy, with more people obtaining their own insurance was likely a factor to fewer members.
Even by withdrawing, it appeared commissioners would remain a part of the program through Dec. 31, 2019 and would be paying for the cash call. In question was whether or not that money may be returned.
Monson said the decision to withdraw was a difficult one. Commissioner Jim Hofer echoed that saying he felt the county had a strong relationship with SCHA. However he and other commissioners agreed that the outlook was not favorable considering the county's "bare bones budget."
"Things don't look very good obviously," Commissioner Chuck Horsager said. "It's beyond the worst-case scenario."
Horsager said he spoke with Wadena County Human Services director Tanya Leskey, who reportedly said SCHA was a good partner, with many benefits to the county. Horsager understood that withdrawing would not drastically change the way the county offers services, however.
The choice to withdraw weighed heavily on two Todd County commissioners, Barb Becker and Randy Neumann, who attended the meeting at 5 p.m. Friday. Todd County is one of the other counties in the plan along with Brown, Dodge, Goodhue, Kanabec, Morrison, Sibley, Steele, Wabasha and Waseca.
Becker said there were still many unknowns but believed that Todd County would have to meet quickly and act swiftly to make a decision before the 30 days were up. With a budget set on Jan. 3, other counties will have to decide within a week if they too will withdraw. According to commissioners, it appeared that if two-thirds of the membership withdraws, SCHA would dissolve.
The Wadena meeting was quickly arranged after commissioners found they had to make a decision likely by Feb. 1. Commissioner Bill Stearns was not able to attend. All other commissioners voted in favor of the resolution to withdraw. Monson noted that Stearns opinion was that staying with SCHA was not sustainable for the county.
Also in attendance was Joel Beiswenger Tri-County Health Care's president and CEO, who shared that working with SCHA was a positive experience.
"In comparison to other insurance providers we will go backwards," Beiswenger said. They were real people, who really cared, Beiswenger added.
The shortfalls SCHA is experiencing come after staffing and provider payment cuts in 2018, a step taken to help lessen the losses.
South Country Health Alliance is a county-based health plan serving 12 counties in Minnesota, which was formed in 2001. According to SCHA's website, the plan was serving over 41,000 members and offered seven different programs to meet the needs of those counties.
By withdrawing from SCHA, the county must still provide some level of care to residents. That means Wadena County Human Services will have to request those services elsewhere after their time with SCHA is through.