An HMO operated by the Mayo Clinic in western Wisconsin is pulling out of the individual market next year and plans to stop selling coverage to employer groups down the road.
The absence of individual market offerings from Mayo's HMO, Health Tradition Health Plan, became apparent to insurance shoppers this week with the launch of open enrollment on the federal government's HealthCare.gov website.
The HMO notified current subscribers about the individual market pullback this summer. In late summer the HMO announced a broader phaseout of health plan activities over the next several years, with a Mayo Clinic spokesman on Friday saying the employer business in 2019 will be limited to final processing of claims and resolution of outstanding issues.
"The current environment is extraordinarily challenging for health care providers and health plans," Mayo said in a statement. "While Health Tradition Health Plan has been successful for more than 30 years, it is a very small plan with around 30,000 members."
At the end of June, Health Tradition provided coverage to more than 9,000 people in the individual market, which primarily serves those under age 65 who are self-employed or don't get health insurance through an employer.
Several health plans across the country have announced pullbacks in the individual market, where insurers have lost money with changes brought by the federal Affordable Care Act (ACA).
The HMO is an option in Eau Claire and 13 other counties in western Wisconsin, said Katherine Hempstead, a researcher at the Robert Wood Johnson Foundation who tracks participation by health plans on government-run exchanges launched under the ACA. While the pullback will reduce health plan options, Hempstead noted that Minnetonka-based Medica is expanding into the individual market next year in seven Wisconsin counties where Health Tradition now operates.
Many of the HMO's enrollees are covered as part of employer group plans, where most won't see changes for 2018. The exception is that about 2,000 people now are covered in small employer plans sold through HealthCare.gov; those plans are going away, although Health Tradition will continue selling to small employers in the "off-exchange" market in the La Crosse, Wis., area.
Health Tradition will continue selling Medicare supplements for 2018, although a Mayo spokesman said Friday he didn't have information about the long-term plan for the Medicare business.
"Health Tradition has decided to phase out its health plans over the next several years," the HMO said in a statement on its website. "This will be a gradual process, and you will have plenty of time to transition to new plan options which also offer Mayo Clinic care. In the meantime, Health Tradition is financially strong and will provide the same excellent access to Mayo Clinic Health System."
About 30 employees will be affected by the phaseout, a Mayo spokesman said Friday. Many staff members are expected to continue their employment through at least March 2019.
Christopher Snowbeck • 612-673-4744
Twitter: @chrissnowbeck
