500,000 Senior Citizens dropped by Medicare HMOs

  1. 31,000 on medicare must make other plans
    october 5, 2001
    by kim norris
    free press business writer

    more than 31,000 michigan senior citizens, most of them in metro detroit, are scrambling to find new doctors or new coverage because their health plans stopped offering them medicare managed-care services.
    the counties hardest hit by hmo withdrawals from the medicare + choice program are wayne, oakland, macomb and ingham, according to the centers for medicare and medicaid service, which administers the federal insurance program. nearly 8,000 enrollees were affected in oakland, nearly 6,500 in macomb, 5,000 in wayne and 4,600 in ingham.

    m-care eliminated 8,279 people from its medicare managed-care program, all of them in macomb and oakland. the nonprofit health plan owned by the university of michigan health system still has about 14,700 seniors in its medicare hmo, but it stopped accepting new members aug. 1.

    in fact, none of the remaining michigan medicare hmos are accepting new members and the program's future remains uncertain in the face of rising delivery costs and insufficient reimbursement from the government.

    blue care network, the largest health plan in the state, is dissolving its medicare blue hmo, affecting 16,940 seniors in 15 counties.

    all seniors 65 and older are covered by medicare, but seniors who enrolled in managed-care programs agreed to see doctors within a network in exchange for receiving additional benefits, such as preventive care and prescription-drug coverage.

    health maintenance organizations started notifying members in the summer of their intentions to curtail or dissolve their medicare managed-care programs. although enrollees remain covered until the end of the year, some already have been forced to switch providers or find alternative coverage because their hmo has pulled out of their county.

    doctors and hospitals increasingly are balking at seeing medicare hmo patients, because they are not sufficiently reimbursed for their services. without doctors and hospitals to provide care, an hmo cannot serve its members.

    the problem is acute in large urban markets, where more than half of medicare + choice beneficiaries live nationwide and where increases in reimbursement rates have lagged behind rising costs since 1997.

    "in the large urban markets, because of inflation, drug costs and technology, you're generally seeing a 10- to 12-percent increase in premiums but medicare + choice plans are at 2 percent" except last year, when it was 3 percent, "so you're looking at four years of losing money," said mohit ghose, spokesman for the american association of health plans in washington, d.c.

    "what these plans that are dropping out are saying is that, at that rate, we cannot meet our expenses."

    hmos had to notify the government of their plans by sept. 17, the results of which were posted on the cms web site. all told, 536,469 seniors are going to be dropped from their medicare hmos at the end of the year.

    enrollment in medicare managed care programs nationwide peaked at 6.3 million in 1999. today, there are 5.3 million people enrolled in medicare + choice, but that number will fall by another half-million in january.

    to see a complete list of medicare + choice enrollment changes in the united states, visit the cms web site at www.cms.gov.

    contact kim norris at 313-222-8762 or norris@freepress.com.

    medicare hmos dumping area to chase more money
    by phil galewitz, palm beach post staff writer
    friday, october 5, 2001

    lake worth -- in the world of medicare hmos, harold friedman of suburban lake worth feels like an outcast.

    he's a customer of beacon health plan, which will stop serving seniors in palm beach county in january. beacon, though, will continue to offer medicare hmo coverage in miami-dade and broward counties.

    friedman, 84, says he can't understand why beacon, as well as united healthcare and av-med, are abandoning him and nearly 10,000 other seniors in palm beach county while they will continue to operate in other parts of south florida.

    "i think it's discrimination," he said.

    actually, the hmos are following the money.

    the federal government next year will pay medicare hmos $631 a month to care for each palm beach county senior they enroll. by comparison, the rate rises to $725 in broward county and soars to $834 in miami-dade county.

    the palm beach county rate still outpaces that of its neighboring northern counties. in martin county, the rate is $564; in st. lucie, it's $612.

    the low reimbursement in the treasure coast explains why none of the statewide or national health plans will operate a medicare hmo there next year, industry analysts say. the only option there in 2002 will be america's health choice, a mom-and-pop hmo that provides care through company-owned clinics.

    the federal government varies the medicare hmo reimbursement by county to reflect the difference in health costs from region to region. health costs are usually higher in bigger cities because of higher labor costs.

    the larger supply of doctors and hospitals drives the demand for more tests and services, and fraud and abuse tend to be more rampant. as a result, the federal government pays medicare hmos the highest rates in big cities, such as miami, new york and chicago.

    medicare hmos for many seniors were seen as a savings grace because the plans provided coverage for expensive prescription drugs and other benefits not covered by traditional medicare.

    but now, with many medicare hmos quitting markets, thousands of medicare recipients have no other choice but to return to traditional medicare coverage.

    when the medicare program started limiting annual increases in reimbursement in 1998, many hmos began leaving less profitable markets such as the treasure coast and palm beach county.

    palm beach county seniors next year will have their choice of five medicare hmos -- health options, humana, america's health, neighborhood health and wellcare. that's half the number available three years ago.

    although seniors still will have several medicare hmo options, nearly all the plans staying in palm beach county are cutting benefits and increasing co-payments and deductibles.

    av-med spokeswoman valerie rubin said the government reimbursement rate is the major reason it's dropping palm beach county seniors.

    the health plan also was able to negotiate lower rates with doctors and hospitals in miami-dade and broward counties, she said.

    ken berkowitz, a consultant with pricewaterhousecoopers in fort lauderdale, said seniors have a right to argue that the medicare program distributes benefits unfairly.

    the medicare program pays too much to plans in urban area and not enough in suburban and rural markets, berkowitz said.

    "the government is using a flawed methodology," he said.

    seniors who lose hmo still covered
    medicare recipients face some tough choices as medicare hmos continue to withdraw from the program. the situation is more complex this year, as the government has allowed plans to drop individual zip codes rather than just entire counties.
    los angeles times, oct. 8, 2001

    full story @

    this is a major problem. anticipate no medicare hmo's by 2002 under existing guidelines. karen
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