Riverside Health System enters health insurance business with launch of Medicare HMO plan

Riverside Health System is joining the list of hospital systems venturing into the health insurance business, with the launch of a health maintenance organization for Medicare beneficiaries.

The Medicare Advantage type plan will supplement Medicare Part A and Part B by providing coverage for prescription medications and a $3,400 cap on copayments for health-care services received from the network. It will also cover preventive dental care, vision care and includes allowances for over-the-counter medication and hearing aids.

“We see a tremendous number of patients eligible for Medicare and we know there are benefits that Medicare doesn’t cover that they want,” said Sally Hartman, Riverside’s senior vice president responsible for strategy, marketing and relations with insurers and other payers.

Offering a Medicare Advantage plan is a way to help people afford those services, she said. The plan is available to residents of the Peninsula and Gloucester County.

There is no premium charged for the plan, but participants must still pay the $148.50 monthly premium for Medicare Part B coverage.

By relying on a network of primary care doctors to direct plan members to needed care, Medicare Advantage plans can use any savings from traditional less coordinated fee-for-service care to pay for additional coverage. Many such plans do so without charging any additional premiums, as will Riverside.

Medicare Part A covers hospital care, Part B covers other medical expenses. They require beneficiaries make copayments of 20% for services, Medicare Advantage plans, including Riverside, set caps on these and in some cases — as with the Riverside plan’s coverage for visits to primary care doctors — require no co-payment at all.

Riverside is partnering with Mary Washington Health Plan, which is affiliated with the Fredericksburg-based system that operates Mary Washington Hospital and Stafford Hospital.

Hartman would not detail how Riverside is financing the plan, but said it will have enough resources to keep promises to members. The finances of HMOs are regulated by the State Corporation Commission’s Bureau of Insurance, which sets standards for capital and reserves.

The Mary Washington plan was established in 2019. It collected $10.3 million in premiums for the first half of 2021, and paid a total of $9.3 million for hospital and medical fees and $1.9 million for prescription medications, according to its latest financial filing with the State Corporation Commission.

After accounting for administrative expenses and a use of reserves, it had an operating loss of $1.9 million for the six months, and reported a capital base of $3.3 million as of June 30, more than double the total a year before.

The plan had 2,253 members as of June 30. The made 9,366 visits to their doctors while 157 were admitted to a hospital for a combined total of 825 days there.

Sentara Healthcare’s Optima health insurance operation was established in 1984, while it acquired a majority stake in VCU Health System’s Virginia Premier health plan in 2019. The Lynchburg-based Centra Health hospital and medical system also operates a health insurance plan.

Dave Ress, 757-247-4535, dress@dailypress.com

©2021 Daily Press. Visit dailypress.com. Distributed by Tribune Content Agency, LLC.