BREAKING: M-Plan drops employer HMO benefits

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 M-Plan Inc., central Indiana’s largest health maintenance organization, will phase out its HMO coverage for employers and is referring its clients to Anthem Blue Cross and Blue Shield.

Anthem’s parent company, Indianapolis-based WellPoint Inc., made the announcement this morning. It said M-Plan covers 125,000 customers through its commercial HMO.

A press release said that M-Plan made the decision “based on the future investments needed to grow and expand their commercial business.

The release said M-Plan would continue to provide coverage for its existing customers until the end of their contract.

M-Plan’s parent organization, Indianapolis-based The Healthcare Group LLC, also has more than 500,000 customers in its PPO plans, or preferred-provider organization, according to IBJ research. Also, M-Plan said it would continue to offer Medicare products in central Indiana.

“M-Plan has made the difficult strategic decision to leave the commercial HMO business,” said Alex Slabosky, president and chief executive officer of M-Plan. “We remain dedicated to ensuring that our customers continue to receive high-quality health care coverage and will do all that we can to ensure our customers have a smooth transition to their new health coverage.

The deal gives Anthem an even stronger hold on the Indiana health insurance market. Anthem already claims about 35 percent of the state’s health insurance customers, with 1.7 million members. Anthem and M-Plan are the No. 1 and No. 2 largest managed care organizations in Indiana, according to IBJ research.

The Healthcare Group is owned by three hospital systems: Clarian Health Partners and Community Health Network, both in Indianapolis, and Deaconess Hospital in Evansville.

According to 2006 data filed with the Indiana Department of Insurance, M-Plan had the second most customers of Indiana HMOs, with 154,000. The Coordinated Care Corp. boasted 182,000.

M-Plan’s customer base was once as high as 180,000 in 2002, but it has steadily declined since then.

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