Sendero’s Path Forward

Community health plan gets one-year budget reprieve

Sendero’s Path Forward

In front of a packed audience of Sendero Health Plans customers and supporters, Central Health's board of managers on Saturday reversed a decision made earlier this month to cap funding of its beloved but beleaguered nonprofit HMO – while making it quite clear that this was the last chance for Sendero to get past its financial woes. "I say this very reluctantly, because I didn't want it to go forward," said board member Shannon Jones, "but I think as a citizen another year will be enough for Sendero to either get its act together or [for us] to end it."

Jones, the newest CH board member and the retired director of Austin Public Health, was one of two managers (the other being Maram Museitif) to change sides from the 4-3 vote on Sept. 12 to wind down Sendero. Instead, the insurer will aim to capture as customers select patients currently in Central Health's Medical Access Program, in what amounts to a bank shot to achieve long-term sustainability. The Travis County Commissioners Court, which had opened the door to disapproving Central Health's entire budget if the Sendero issue wasn't resolved, duly signed off on the FY 2019 spending plan on Tuesday.

Bizarrely, Sendero needs to cover up to 500 of MAP's sickest patients, with Central Health paying 100% of their premiums, so it can draw down more federal funding under the Affordable Care Act. Right now, because Sendero's members are relatively healthy – usually good news for an insurance company – it has to pay into the ACA risk pool more than it gets back. Central Health already helps cover Sendero premiums for about 1,500 of its 24,000 members, including the musicians getting insurance via the Health Alliance for Austin Musicians (HAAM) and the SIMS Foundation. The ACA funding for Sendero could be quite a bit higher than the federal match Central Health currently receives for the same patients under MAP.

The complications and nuances of health insurance in general, and the ACA in particular, have occupied Central Health's and Sendero's boards and staff (including CH President and CEO Mike Geeslin, former director of the Texas Department of Insurance) for years. "The deck is stacked against Sendero," said board member Sherri Greenberg. "Texas did not expand Medicaid. State regulations hurt them. Federal reimbursement rates hurt them. Changes to the ACA hurt them. We have to commit to using our dollars to provide the best health care to the most people."

For civilians, including most of the pro-Sendero crowd on Saturday, the issue was more binary: Either Central Health keeps Sendero alive, or its members go completely without health insurance, and some of them go bankrupt or get sicker or die. While that's far from a guaranteed outcome in a Sendero-free world, the concerns of the members themselves were amplified by Democratic Socialists for Medicare for All activists and critics of Central Health's financial support of the Dell Medical School at UT. "We all know health care in the U.S. is broken," Greenberg said. "We cannot fix it here today."

They were also echoed by the three original pro-Sendero board members, including Cynthia Valadez, who noted that "We'll never have this opportunity again. By next summer, Sendero will know if this was a good gamble and the right thing to do. But we have to care. We're talking about humans, not about whether Sendero is going to take more out of my budget." For this next year, it's only $2 million more, but increased premium assistance would be an ongoing cost to Central Health if Sendero makes it.

The plan going forward involves a lot of risk, requiring Sendero to maintain its overall enrollment during this year's ACA sign-ups (beginning Nov. 1) and to convince MAP patients to switch, since Central Health cannot simply move those patients to Sendero on its own. "If everything is perfect, we can get through to 2020 when we get a windfall from the [ACA] risk pool," said Charles Bell, who both sits on the Central Health board and chairs the Sendero board. "If it's not perfect, you're going to hear us talking about how we can safely and responsibly wind down."

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Central Health, Sendero Health Plans, Sendero, board of managers, Shannon Jones, Sherri Greenberg, Maram Museitif, Cynthia Valadez, Charles Bell, Mike Geeslin, Travis County Commissioners Court, Affordable Care Act, ACA, Texas Department of Insurance, Dell Medical School

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