HMO Enrollment Reported Down in New England

March 7, 2005

HMO enrollment continues to decline in most New England states — even Massachusetts, traditionally an HMO tronghold, according to a report by HealthLeaders-InterStudy, a provider of managed care industry intelligence.

According to the latest issue of the New England Health Plan Analysis, HMOs’ share of the commercial market in Massachusetts went from 65% in January 2004 to 62% in July 2004. In Maine, it went from 26.9% to 23.1%; and in Vermont, from 24.5% to 24.2%. But in New Hampshire, HMOs’ share of the commercial market was up slightly, from 35.7% to 36.2%.

“There is continuing migration to PPOs,” said Paula DeWitt, HealthLeaders- InterStudy analyst. “Massachusetts has strong regional plans and will likely continue to be an HMO stronghold, but even it isn’t immune to the migration into more open-access products. In addition, while all New England states reported net profits through the third quarter of 2004, profits were down in Massachusetts, New Hampshire, and Rhode Island compared to the same period in 2003.”

The firm also reported on other factors at play in the managed care fiel. Tufts Health Plan has formed an alliance with national player CIGNA HealthCare to offer an open-access PPO-type product to large- and medium-size businesses. Medicare HMOs in New England are adding options and some are enhancing benefits for 2005. For example, Fallon Community Health Plan is offering a new option called Fallon Senior Plan Saver with no premium.

HealthLeaders-InterStudy is a a newly formed company of Decision Resources, Inc. (http://www.decisionresources.com/).

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