Health insurance provider Colorado Access is going to cut Medicare coverage for the coming year. As a result of the move around 5,500 senior and disabled customers will have to look for alternatives.

Chief operating officer of Colorado Access, Matt Case has said that the Denver-based nonprofit will also let go 83 employees who were a part of Colorado Access Medicare and its subsidiary Access Health Colorado. Besides this, extra 40 openings will remain unfilled. Case said that Colorado Access has also drawn down administrative expenses, cutting down the salaries of its executive teams.

Case said, “While it's never easy to exit a business and wind things down and, especially, to affect people's jobs. In our case it was absolutely necessary”. He said that the changes could save Colorado Access $20 million to $25 million next year.

Case mentioned that the said Colorado Access has been dogged due to high care costs and low government reimbursement rates associated with its relatively low number of Medicare customers. The Denver-based nonprofit includes 1 million Medicaid and Child Health Plan Plus members.

He added that Colorado Access is going to have 465 employees by January 1, and will focus its resources on areas, including integrated care and initiatives highlighted under the Centers for Medicare and Medicaid Services' State Innovation Model.

Case didn't mention anything regarding offering Medicare coverage again. Colorado Access has already shared plans for the program for 10 years, but according to Case re-entering that market is going to require a ‘strong partner in the health system’.

In order to participate, Medicare Advantage and other Medicare health plans have to sign a year contracts with the Centers for Medicare and Medicaid Services, or CMS. CMS regional spokesman Michael Fierberg said that any issuer can take a decision to participate in, withdraw from or change the boundaries of a plan they have selected to offer.

"When you think about the kinds of families that we have helped support over time that have depended on us, it breaks our heart to have to make this decision," Case said.

"While some plans make changes in their coverage areas every year, I think it's fair to say that we are not seeing an increase in plans withdrawing completely from the Medicare Advantage program," Fierberg wrote in an e-mail. "In fact, enrollment in this program is growing every year."