Baptist Health Plan of Lexington is exiting the fully-insured health insurance market, company officials said Wednesday in a news release.
The release said the decision was because of “challenges due to a rapidly changing healthcare regulatory environment.” That will have a big impact in Lexington, where a number of fully-insured customers are concentrated.
“We want to reassure our members that Baptist Health Plan is financially sound, and claims will be processed and paid according to policy terms,” officials said. “We recommend plan members speak to their employer regarding their specific contract terms.”
Baptist Health Plan, which is operated by Baptist Health as a not-for-profit managed care corporation, “is financially sound,” officials said.
In fully-insured health plans, employers pay an insurance provider in advance to cover projected claims, along with the insurer’s overhead and administrative costs. In a self-funded plan, the money collected by the organization is paid out as claims occur.
In a letter sent to Kentucky insurance brokers, James Fritz, president of Baptist Health Plan, said the plan stopped issuing fully-insured policies as of July 1. Baptist Health Plan previously operated as Bluegrass Family Health.
The health plan has been in operation since October 1997. Officials said Wednesday that the plan covered 80,000 people, with less than half in the fully-insured commercial market. The majority of customers are in Kentucky and southern Indiana.
The officials said the company will be in touch later with self-insured groups for whom Baptist Health Plan Provides third-party administrator service.
They also said customer notices were delivered on or before July 1 for policies expiring Dec. 31.
Last October, Baptist Health Plan withdrew from Kentucky’s individual health insurance market for the 2017 plan year. The Kentucky Department of Insurance said then that Baptist Health Plan was the state’s fourth-largest health insurance provider.
On Wednesday, the Kentucky Department of Insurance listed Baptist Health Plan as the state’s fifth-largest health insurer.
A sample letter for fully-insured employer groups said anyone with questions may call 1-800-787-2680 and select option 5.