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
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
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
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
On the Net: Medicare HMOs site:
AAHP site: http://www.aahp.org