The 800 federal employees and retirees who were enrolled in Maxicare's insurance program will have to join FHP, Utah's largest health maintenance organization, if they want to remain with a health maintenance organization.
Under an agreement worked out with state regulators, most employers who offered Maxicare as an alternative to their employees can now choose as a replacement any of the seven other HMOs actively doing business in Utah.FHP, however, remains the only HMO with federal approval to offer service to civilian employees at federal work sites such as Hill Air Force Base, the Internal Revenue Service and Defense Depot Ogden.
"It is true that if they want to stay with an HMO they have to go to FHP," said Richard Hurt, a public information specialist with the federal Office of Personnel Management. "The reason why is it's the only other HMO that's been approved in Utah to participate in the federal employees benefits plan.
Maxicare withdrew from Utah this week after incurring five straight years of losses. A state insurance regulator said Maxicare had lost 9,000 members since the beginning of the year, dropping its membership to 20,000 by the time the Los Angeles-based company decided to quit business in Utah.
Meanwhile, the state Insurance Commission has assigned a liquidator to Maxicare's case to sell off the company's Utah assets and reimburse creditors. Former members who have bills that Maxicare hasn't paid generally won't have to worry about them, said Jilene Whitby, administrative assistant to the commissioner.