The Community Health Care Center Plan, Inc., a Federally Qualified Health Maintenance Organization

HRD-77-141: Published: Apr 25, 1978. Publicly Released: Nov 17, 1982.

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The Community Health Care Center Plan, Inc. (CHCP), New Haven, Connecticut, a health maintenance organization (HMO), was evaluated in accordance with the Health Maintenance Organization Act of 1973, as amended. Under the law, HMOs are legal entities that provide prescribed health care services to their members in return for a prepaid, fixed, and uniform payment.

CHPC offers the required health benefits and meets the requirements of the act except that it does not have an open enrollment period and does not enroll members that broadly represent its service area. The Department of Health, Education, and Welfare (HEW) awarded CHCP a $2,090,000 loan to help meet estimated operating losses for the period October 1, 1975, to September 30, 1978. Based on financial projections, CHCP will need the maximum $2.5 million Federal loan (an additional $410,000 through September 1978). The projections indicate that it could break even between October 1978 and September 1979 and could operate without Federal financial assistance if it increases enrollment, expands capacity, increases premiums, reduces hospital utilization, and obtains an additional loan from HEW. CHCP has had a negligible economic impact on employers who have offered the plan to their employees, and it has been accepted by both labor unions and other health care plans in the New Haven area.

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