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Bluegrass Family Health HMO Closes up Shop in Kentucky at the End of the Year 2010

Posted Jul 08 2010 11:02am

The smaller HMO/Health insurance firm states they could not compete and find contracts that compete with Blue Cross.  We could see more of this as many individuals have opted for the less expensive PPO plans which offer a high deductible and basically are there to cove a “big” event.  HMO premiums by comparison image have become non affordable to many and thus the HMOs are feeling the pinch and we have this happening here in California too. 

Overall over 6000 individuals are affected and will need to shop for new coverage.  BD  

About 276 employers in Tennessee will have to shop for new insurance carriers as Bluegrass Family Health of Lexington, Ky., pulls out of the state.

Last week, Bluegrass told the state that it would stop issuing or renewing small and large group health coverage statewide at year-end. The company cited difficulty competing with non-HMO plans after Tennessee increased a state tax on the premiums collected by health maintenance organizations.

The tax increase from 2 percent to 5.5 percent — the most allowable under the law — was projected to raise $136 million a year to help defray costs of the state's TennCare program. For the recent first quarter, Bluegrass paid $265,437 under the new premium tax rate after paying $82,078 a year earlier

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