HMOs drop Medicare recipients

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HMOs drop Medicare recipients

By Jo

The New York Times

Sunday, December 31, 2000

SPRINGFIELD, Ohio -- Castle, a Medicare recipient and retired

factory worker with an ailing heart, has been in three health maintenance

organizations in the past three years.

His present one is dropping him on Monday.

The first, United Healthcare of Ohio, cut benefits, so he switched. The

second, Secure Horizons, left the state. And Aetna U.S. Healthcare, will drop

all 52,330 Medicare HMO beneficiaries in Ohio as the new year begins, having

concluded that " inadequate government reimbursements have made operating a

number of our Medicare HMOs no longer viable. "

Across the nation on Monday, at least 646,502 elderly and disabled people

will be dropped by HMOs pulling out of the Medicare program, the government

said.

In Texas, 180,749 people will be affected. Elsewhere, 64,329 people in New

York; 51,185 in Connecticut; 12,411 in New Jersey; 87,727 in Florida; 53,464 in

California; 21,781 in Massachusetts; 89,641 in Pennsylvania; 53,038 in land;

and 32,177 in Washington will be dropped from HMO plans.

The Health Care Financing Administration, which runs Medicare, said 65

HMOs have chosen not to renew their Medicare contracts into 2001, while 53

health plans will withdraw from selected counties.

Advocates for the poor and elderly say these cuts will hurt a group of

people least likely to be able to financially rebound.

These Medicare recipients most affected are likely to be poorer, less

educated and in worse health than others in the program, according to a recent

survey by an independent public policy research group of those dropped last Jan.

1.

" Terminations in 2000 affected a disproportionately vulnerable subgroup of

beneficiaries, many of whom were confused about their options and worried about

the future, " concluded Marsha Gold and Justh in the survey, which they

conducted for Mathematica Policy Research Inc. in Washington.

" It's a dirty trick, " said Castle, 73, as he thumbed nervously through a

thick stack of papers he had brought to the Elderly United Downtown Center in

Springfield in search of advice from Lynn Heskett, the center's medical claims

coordinator.

The most severe consequence for the elderly and people with disabilities

being dropped by their HMOs, health experts said, is the loss of the

prescription drug benefits that covered 68 percent of those enrolled in such

plans.

Although everyone dropped from a Medicare HMO can return to the basic

fee-for-service Medicare, it does not pay for drugs. Neither do the supplemental

Medicare policies, the so-called Medigap plans, in which enrollment is

guaranteed to those who are dropped.

In Texas, the deadline to apply for Medigap coverage is March 4; after

that, an insurance company has the right to reject applications because of

health problems. The 11 HMOs in Texas that are withdrawing from Medicare were

required to send letters apprising people in their plans and of their rights to

Medigap coverage.

The cost of these policies, which pay doctor and hospital charges not paid

by Medicare, vary among the private companies that offer them. They also vary

from state to state. In Ohio, they cost from $40 to $143 a month. But the few

Medigap policies that cover drugs cost as much as $418 a month in Ohio, and

acceptance is not guaranteed.

Nationally, 31 percent of those dropped by an HMO have no other health

maintenance plan in their area to turn to, while the rest have at least one,

according to a separate analysis by Gold for Mathematica and the Department of

Health and Human Services.

A few urban areas have been hit hard.

The eastern part of Indianapolis does not have an HMO in which the elderly

can enroll; nor does Baltimore or the Washington metropolitan area.

But the situation is worst in rural areas, where 94 percent of those being

dropped as of Monday have no HMO they can join.

Pisano, vice president of the American Association of Health Plans,

an industry group in Washington, said that the Medicare managed care program,

known as Medicare+Choice, has been " underfunded and overregulated. "

" Payments have gone up 2 percent a year, while expenses have gone up 10

percent a year, " Pisano said. " Plans have been forced out of markets. "

She contends that the plans need $15 billion in the next five years for

Medicare enrollees. That does not include billions of dollars that HMOs would

receive for providing drug benefits under President Clinton's plan and most

congressional proposals.

Under a bill approved by Congress just before it adjourned, HMOs will

receive $10 billion more for Medicare over five years than under the current

law.

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