More HMOs to drop Medicare patients

Home Health Columnist / Guide · Oct 3, 2001

By Julie Appleby, USA TODAY

The exodus from the Medicare HMO program will continue next year, with thousands of members having to find new plans, while those who remain will face higher costs and reduced benefits.

Patients in some areas will have to return to traditional Medicare, losing their prescription drug benefits, which is what attracted many to Medicare HMOs.

The program, with 5.5 million members, was designed to reduce

government costs while giving patients more benefits. Tom Scully, who oversees Medicare, said Wednesday that he expects plan

withdrawals to affect "a few hundred thousand" patients next year, based on reports filed Monday by health insurers.

Scully says the Bush administration remains committed to adding a prescription drug benefit to regular Medicare, but conceded that last week's terrorist attack may push that effort into next year.

Queries to the largest insurers Wednesday found:

PacifiCare, the largest Medicare HMO, with 995,000 members, will drop more than 26,000 patients in the eight Western states it serves. Premiums and the amounts patients pay for doctor visits and drugs will increase for the policies that remain. The insurer will start selling separate policies designed to help patients on traditional Medicare meet deductibles and will launch a drug discount card.

Kaiser Permanente, the second-largest Medicare insurer, with 807,000 members, would not say what its plans are. A spokesman said it will send letters to members in the coming weeks.

Humana, the third-largest Medicare HMO with 407,000 members in seven states, says it will drop its business in Louisville, affecting 14,000 patients. Drug benefits will change. In some markets, patients will be required to take generic drugs, unless

there are only brand-name options available. And premiums will rise.

United Healthcare, the fourth-largest insurer, will leave Arkansas and shut some programs in Ohio, Florida and Illinois, affecting about 57,000 members.

Aetna, the fifth-biggest insurer, which dropped 340,000 patients this year, would not divulge its plans for next year other than to say that next year's withdrawals will affect a smaller number of patients.

Other, smaller plans around the country also announced withdrawals and benefit changes. ConnectiCare in Connecticut will drop all its Medicare HMO business, affecting nearly 25,000 patients. Medicare HMO patients will continue to have coverage through the end of this year and should not immediately jump to change plans. No matter what happens, they automatically qualify for coverage under traditional Medicare.

Scully, in remarks to health care organizations Wednesday, says Congress needs to take action to get more money to Medicare HMOs, before the program "shrivels up and blows away." Medicare HMOs generally offer patients more benefits, such as drug coverage and eyeglasses, than traditional Medicare, but limit patients' choice of doctors and hospitals.