The decision to cap enrollment in the county-run health insurance program for low-income residents who lack coverage is evidence of a crisis in health care, the program’s director said.

The Washtenaw Health Plan stopped accepting new enrollees in late May in its Plan B program after it reached more than 8,300 patients. The program, which covers primary care visits, outpatient lab tests and other services, is designed to support only 7,000 patients.

That’s left local clinics that provide safety net services struggling to care for rising numbers of uninsured patients.

“What happened is that demand for program services far exceeds the resources we have to serve people,” said Ellen Rabinowitz, the program’s executive director. “The good news for the program is that our revenues are fairly stable, but the bad news for the community is that there has been an unprecedented increase in the amount of need.”

The 7-year-old Plan B program, which was open to uninsured patients who earn up to 200 percent of the federal poverty rate, had been growing its annual enrollment by 10 percent to 15 percent. That rate spiked to 40 percent in 2007 as the poor economy pushed more residents off of commercial insurance plans, Rabinowitz said.

Enrollment in a state-run Plan A program, which offers more generous benefits but has more narrow eligibility requirements, also has been closed since May and had more than 2,000 patients enrolled as of late June.

Together with a prescription-drug discount program, the two insurance plans run on a budget of about $10 million through a complicated mix of local, state and federal funds. It also relies upon millions of dollars worth of uncompensated care from the University of Michigan hospitals and St. Joseph Mercy Hospital in Ypsilanti.

The program follows the patient-centered medical home model by assigning patients to a primary care physician, who helps coordinate specialty care and offers expanded office hours. Patients are responsible only for a copay for prescription drugs.

The most recent study from the county’s Public Health Department, now several years old, counted 35,000 uninsured residents in Washtenaw County, but the real figure is likely higher now, Rabinowitz said.

The nonprofit Packard Community Clinic in Ann Arbor typically enrolls 300 patients per year in the Washtenaw Health Plan or Medicaid. The enrollment cap has left clinic officials grappling with how to cover costs for those patients who make too much to qualify for Medicaid coverage but are barred from enrolling in WHP.

“We’re seeing the same number of people who need help,” said Kimberly Kratz, Packard’s executive director. “We’re trying to cover the cost of that in our charity care program. There are limits, however, in what any community clinic can do.”

The clinic tries to maintain a balance of about half commercially insured patients, whose reimbursements help to cover some of the costs of covering the uninsured. But officials say they expect the gap to widen.

“We don’t think we’ve hit bottom yet,” Packard spokeswoman Deborah VandenBroek said.

At the Corner Health Center in Ypsilanti, which serves low-income patients ages 12-21 and their children, most clients are uninsured when they walk in, said Ellen Clement, the executive director who took over in late June. The Washtenaw Health Plan has provided grants to cover uninsured or uncompensated care that will last through the end of September, but there’s been no word on whether it will be renewed.

“We see impact across most of our funding streams,” Clement said. “Actually our private donations are sustaining quite well at this point. But our grant opportunities are reducing, some of the grant foundations and private donors are reducing and some are going away.

“We definitely have a large hole in our budget that we are trying to fill.”

Meanwhile, it’s not clear when enrollment might re-open in the plans. Retention rates are stronger now, since patients know they won’t be able to re-enroll if they drop out, Rabinowitz said.

Enrollment had swollen this year thanks to leftover fund balances from previous years that have since been exhausted, Rabinowitz said. Through attrition, officials hope to bring enrollment back down to between 6,000 and 7,000 patients.

“We have a real crisis in our community and nation,” Rabinowitz said. “I’m anticipating the Obama administration’s health care reform. I’m hoping that that will ease the crisis to at least some extent.”

Sven Gustafson writes about technology, health care and other topics for Michigan Business Review. Contact him at (734) 302-1732.