Jackson Health System permitted to market Medicare plan

By John Dorschner
jdorschner@MiamiHerald.com

Jackson Health System’s troubled insurance plan is belatedly being allowed to market its Medicare Advantage plan to seniors after a stern consent order from state regulators demanding Jackson make its plan profitable by the end of next year or abandon it.Under the consent order, the money-losing JMH Health Plan must become profitable by Dec. 31, 2012. If it doesn’t, the plan will have to “wind down its operations and voluntarily surrender its certificate of authority.”

The order, written by Florida Insurance Commissioner Kevin M. McCarty, was formally accepted by the Jackson board at Monday meeting. The action means that JMH Health Plan can start marketing its Medicare health maintenance organization plan to seniors. Most companies began selling their Medicare plans on Oct. 15, when open enrollment formally started. As of 2 p.m. Tuesday, JMH’s plan information was not available at Medicare.gov, the government consumer site where seniors can compare plan offerings. But Jackson is now permitted to start marketing efforts, such as mailing brochures to seniors.

In April, state regulators notified JMH Health that it was not allowed to write any new business — such as selling its Medicare Advantage plan to seniors — without written approval from the Office of Insurance Regulation because of “concerns with JMH Health’s solvency.”

The health plan — which includes the Medicare plan, a commercial plan and a Medicaid HMO — has lost $17.2 million this year through September. The Medicare plan, with 2,300 members, was marginally profitable, earning about $603,000 so far this year, according to a September report on the plan’s finances. The commercial plan, with 19,600 members, had lost $3.5 million through September. The Medicaid HMO, with 12,400 members, had lost $14.3 million.

Earlier this month, Jackson announced it would move its 11,000 employees out of the JMH commercial plan and put them in AvMed starting Jan. 1. Last week, the board announced plans to sell the Medicaid HMO to Simply Healthcare, whose lead investor is insurance veteran Miguel “Mike” Fernandez. The price was $625,000 in cash, plus possible additional payments of $1.875 million.

In the consent order, the OIR required that all proceeds from the Medicaid sale stay in the JMH Health Plan to bolster reserves. OIR also demanded complete information, including independent background reports and biographical affidavits, on the health plan’s new officers. At present, the interim leader of the plan is Fernando Salgado, Jackson’s chief transformation officer, who has been an executive with several major companies, including IBM, but has never worked in health insurance.

The JMH Health Plan is the insurance company owned by Jackson Health System, Miami-Dade’s public hospital services, which serves as the safety net for the county’s poor and uninsured. In the past three years, it has lost more than $400 million.


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