Tags: Half | Million | Seniors | Lose | Medicare | HMO

Half Million Seniors to Lose Medicare HMO

Friday, 21 September 2001 12:00 AM

All health insurers offering Medicare+Choice plans were required by law to report to the government by Sept. 17 their intentions for next year. They had to indicate whether they would remain in the same geographical areas, reduce coverage or pull out altogether. They also had to show what benefits they would offer and while federal law requires them to match traditional Medicare fee-for-service coverage, most HMO plans have tried to offer more, including prescription benefits.

An initial analysis of those reports by the American Association of Health Plans found despite the terrorist attacks on the World Trade Center and Pentagon on Sept. 11, which has deeply affected the insurance industry, all participating plans met the deadline, including Empire Blue Cross and Blue Shield of New York, which had its main offices located in the WTC Tower One.

The main reason for reducing coverage or pulling out was financial. "We have a program where the costs are outstripping reimbursements by 6 to1 on average," AAHP President Karen Ignagni told reporters. "We're seeing very sharp increases in health care inflation. We haven't seen increases like these in 10 years."

Ignagni said health care costs are increasing by 10 percent to 12 percent this year but many Medicare+Choice plans are locked into a 2 percent annual reimbursement increase because of the way the government set the payment formula into law when it created the program through the Balanced Budget Act of 1997. Even though Congress increased the reimbursement rate by 1 percentage point for these so-called floor plans, it only is in effect for this year.

"Our plans want to serve this population," she said. "Congress will have to wrestle with this. This is a safety net program." The only bright note was that the half-million estimate is about one-half of the number of seniors who lost coverage at the beginning of 2001 because their health plans either reduced coverage areas or pulled out of the program.

Ignagni said because AAHP was "very mindful of the nation's focus" on the terrorist attacks and the nationwide grief, she would not release detailed statistics about the plans and their financial situations.

Ben Singer, vice president of public relations for PacifiCare, based in Santa Ana, Calif., said the company has tried to remain in the Medicare+Choice program by "trimming along the edges of those smaller markets," reducing benefits and trying not to have to pull out of large areas.

However, in 2002, PacifiCare will exit 44 counties, impacting 64,222 Medicare beneficiaries, who either will have to find another Medicare+Choice plan or return to the traditional program. Premiums also will go up for the remaining 1 million members in eight western states.

"This thing (Medicare+Choice) probably has two or three more years in it and that's it," Singer told United Press International. "Each year it will become more difficult." Milwaukee-based Blue Cross Blue Shield United of Wisconsin has told the government it will no longer offer a Medicare+Choice plan in 2002, but will continue to offer its Medicare supplemental insurance. The decision will impact some 10,000 seniors.

Blue Cross Blue Shield of Florida has decided to pull out of seven counties in 2002.

Copyright 2001 by United Press International. All rights reserved.

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All health insurers offering Medicare+Choice plans were required by law to report to the government by Sept. 17 their intentions for next year. They had to indicate whether they would remain in the same geographical areas, reduce coverage or pull out altogether. They also...
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2001-00-21
Friday, 21 September 2001 12:00 AM
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