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Back To Vidyya Medicare To Be Dropped By HMOs

710,000 Medicare Recipients Will Be Left Without Insurance

At least 711,000 elderly and disabled Americans would be jettisoned by HMOs planning to close their doors to Medicare beneficiaries next year, an industry group says.

HMOs say Medicare payment limits and regulations enacted by Congress in recent years have made serving senior citizens cumbersome and unprofitable.

"This program has been overregulated and underpaid," said Karen Ignagni, president of the American Association of Health Plans, which represents HMOs.

AAHP said Thursday that an informal survey answered by 37 of the largest HMOs serving Medicare beneficiaries turned up 18 that are planning to withdraw service in at least one county in 2001.

Those 18 health plans, which the association did not name, reported the anticipated withdrawals would affect 711,055 enrollees.

The predicted 2001 closings would double the more than 700,000 beneficiaries already stung by a swarm of HMO pullouts that have plagued Medicare since 1999.

When an HMO closes, Medicare beneficiaries who were enrolled do not lose health insurance coverage. But they must find another HMO, which may mean having to switch doctors, or else return to submitting medical bills directly to Medicare, losing the extra benefits many HMOs offer.

"Medicare beneficiaries who are affected by plans leaving Medicare should remember that no matter what, they are still covered by a strong Medicare program," said Medicare Administrator Nancy-Ann DeParle.

DeParle stressed that those affected by HMO closings can stay in their health plans until the end of the year and should not rush to make a change.

For HMOs that continue in Medicare, changes in premiums, copayments and extra benefits are expected and will not be final until fall, when Medicare mails information to beneficiaries about their choices.

Currently, Medicare says that of its 39 million beneficiaries, 27 million have at least one HMO open to them and 6.5 million are enrolled in one.

HMOs participating in Medicare must officially inform the government by July 3 of intentions to withdraw from the program in 2001. But some announced their plans to the public earlier.

For example, Aetna U.S. Healthcare said Thursday that it will not renew its Medicare contract next year in 11 states: Connecticut, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Ohio, Texas and Washington. Some counties in New York, Pennsylvania and Northern California would be cut.

The Aetna withdrawals alone, effective, Dec. 31, would touch 355,000 Medicare beneficiaries. Other large HMOs that have announced Medicare withdrawals in some areas so far include Cigna HealthCare and Foundation Health Systems.

"Unfortunately, inadequate government reimbursements have made operating a number of our Medicare HMOs no longer viable," said Aetna CEO William H. Donaldson.

Medicare payments were curbed in 1997 by legislation to balance the federal budget. AAHP officials said the 2 percent annual raises HMOs have been getting since then do not keep up with health care costs that are rising by 6-8 percent.

Lawmakers of both parties, facing angry senior citizens as elections near, have pledged to look for more money this year for HMOs from expected budget surpluses. President Clinton has made a similar promise.

On the Net: Medicare HMOs site: www.hcfa.gov

AAHP site: http://www.aahp.org


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Editor: Susan K. Boyer, RN
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