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700,000 Plus Medicare Beneficiaries Abandoned by HMOs

Tue, 07/04/2000 - 11:00pm — Karen Stevenson
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Insurance companies had to inform the Health Care Financing Administration (HCFA) by July 3 of planned withdrawals from the Medicare managed care or HMO program for changes they expect to make January 1 of the following year. Many of the largest insurance companies in the program have announced program cutbacks, and estimates are that a total of 700,000+ beneficiaries will be affected by these changes this year, the largest mass-withdrawal in the history of the program.

This is the third year for major changes in this marketplace. In 1999, 41 organizations chose not to renew their Medicare+Choice contracts and 58 reduced their service areas for the year 2000. As a result of those withdrawals, more than 327,000 Medicare beneficiaries were affected and about 79,000 were left with no Medicare managed care options. A year earlier, in 1998, plan nonrenewals and service area reductions affected approximately 407,000 Medicare beneficiaries enrolled in managed care plans and of those, approximately 47,000 had no other managed care options.

Announcements made so far include:

The nation's largest health insurer, Aetna U.S. Healthcare, said 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, as well as some counties in New York, Pennsylvania and Northern California. The Aetna withdrawals would affect 355,000 Medicare beneficiaries.

  • UnitedHealth Group Inc., the nation's No. 2 health insurer, said it will stop providing Medicare coverage in parts of in 45 counties in seven states -- Arizona, Florida, Georgia, Illinois, Maryland, Massachusetts and Rhode Island. The cutbacks will affect about 56,000 of United's 400,000 Medicare customers.
  • Pacificare Health Systems, the nation's largest Medicare HMO with 1 million customers, said it will not have any cutbacks in California, its biggest market, but said it was closing its managed healthcare unit in Ohio and Kentucky, where it has more than 60,000 customers, to concentrate on operations in the western United States.
  • Humana said it will withdraw its Medicare plans in parts or all of six states at the end of the year. The decision affects about 84,000 of their 518,000 members, including those in parts of Florida, Texas, Ohio, Kentucky, Illinois and Missouri.
  • Cigna Corp. said it was pulling out of certain Medicare markets, affecting about 104,000 beneficiaries, but has not announced the specific regions which will be affected.
  • Foundation Health Systems (FHS) said that its subsidiaries would no longer offer a Medicare+Choice product in 18 counties in Arizona, California, Connecticut, New Jersey, New York and Pennsylvania, as of January 1, 2001. The action will affect approximately 19,000 of their 259,000 Medicare HMO members.
  • Sierra Health Services said that it would pull its Medicare+Choice products out of 14 counties in the Houston, Texas area, affecting about 1,500 people.
  • Oxford Health Plans said that it intended to discontinue offering its Medicare+Choice program in eight counties in New Jersey beginning next January, affecting approximately 7,200 beneficiaries. The company said that to would continue to offer its Medicare products in 12 counties in New York, New Jersey and Connecticut.

The American Association of Health Plans (AAHP), America?s largest managed healthcare trade association, earlier announced the results of a survey showing that 711,055 beneficiaries will be affected in 2001 by health plan withdrawals from Medicare+Choice markets. The survey includes health plans serving 5 million beneficiaries, about 85% of all beneficiaries in Medicare+Choice. The survey does not identify the specific plans or regions affected by planned withdrawals.

The health plans responding to the survey cited inadequate funding and over-regulation as the primary reasons they were forced to withdraw from these markets. HCFA executives continued to maintain that program funding is adequate, and have announced an expedited process for approving plans which would provide coverage in the areas affected by the withdrawals. In spite of HCFA's reassurance, it certainly appears that the Medicare+Choice program has been less than a resounding success.

HCFA Administrator Nancy-Ann DeParle cautioned beneficiaries that they do not need to do anything until they receive an official letter from their HMO in October, and that they will have coverage under their current HMO until January 1, 2001. However, it is not too early for affected beneficiaries to begin educating themselves about their rights and the alternatives available to them.

HCFA will post a detailed list of HMO withdrawals in all affected areas by July 10 on http://www.medicare.gov, as well as information for beneficiaries about next steps and alternatives. HMOs4Seniors has posted some additional information about plan withdrawals and beneficiary alternatives at http://www.hmos4seniors.com/briefing2.htm. Watch for more information in upcoming issues about Medicare HMO beneficiary rights and alternatives.

Insurance companies had to inform the Health Care Financing Administration (HCFA) by July 3 of planned withdrawals from the Medicare managed care or HMO program for changes they expect to make January 1 of the following year. Many of the largest insurance companies in the program have announced program cutbacks, and estimates are that a total of 700,000+ beneficiaries will be affected by these changes this year, the largest mass-withdrawal in the history of the program.

This is the third year for major changes in this marketplace. In 1999, 41 organizations chose not to renew their Medicare+Choice contracts and 58 reduced their service areas for the year 2000. As a result of those withdrawals, more than 327,000 Medicare beneficiaries were affected and about 79,000 were left with no Medicare managed care options. A year earlier, in 1998, plan nonrenewals and service area reductions affected approximately 407,000 Medicare beneficiaries enrolled in managed care plans and of those, approximately 47,000 had no other managed care options.

Announcements made so far include:

The nation's largest health insurer, Aetna U.S. Healthcare, said 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, as well as some counties in New York, Pennsylvania and Northern California. The Aetna withdrawals would affect 355,000 Medicare beneficiaries.

  • UnitedHealth Group Inc., the nation's No. 2 health insurer, said it will stop providing Medicare coverage in parts of in 45 counties in seven states -- Arizona, Florida, Georgia, Illinois, Maryland, Massachusetts and Rhode Island. The cutbacks will affect about 56,000 of United's 400,000 Medicare customers.
  • Pacificare Health Systems, the nation's largest Medicare HMO with 1 million customers, said it will not have any cutbacks in California, its biggest market, but said it was closing its managed healthcare unit in Ohio and Kentucky, where it has more than 60,000 customers, to concentrate on operations in the western United States.
  • Humana said it will withdraw its Medicare plans in parts or all of six states at the end of the year. The decision affects about 84,000 of their 518,000 members, including those in parts of Florida, Texas, Ohio, Kentucky, Illinois and Missouri.
  • Cigna Corp. said it was pulling out of certain Medicare markets, affecting about 104,000 beneficiaries, but has not announced the specific regions which will be affected.
  • Foundation Health Systems (FHS) said that its subsidiaries would no longer offer a Medicare+Choice product in 18 counties in Arizona, California, Connecticut, New Jersey, New York and Pennsylvania, as of January 1, 2001. The action will affect approximately 19,000 of their 259,000 Medicare HMO members.
  • Sierra Health Services said that it would pull its Medicare+Choice products out of 14 counties in the Houston, Texas area, affecting about 1,500 people.
  • Oxford Health Plans said that it intended to discontinue offering its Medicare+Choice program in eight counties in New Jersey beginning next January, affecting approximately 7,200 beneficiaries. The company said that to would continue to offer its Medicare products in 12 counties in New York, New Jersey and Connecticut.

The American Association of Health Plans (AAHP), America?s largest managed healthcare trade association, earlier announced the results of a survey showing that 711,055 beneficiaries will be affected in 2001 by health plan withdrawals from Medicare+Choice markets. The survey includes health plans serving 5 million beneficiaries, about 85% of all beneficiaries in Medicare+Choice. The survey does not identify the specific plans or regions affected by planned withdrawals.

The health plans responding to the survey cited inadequate funding and over-regulation as the primary reasons they were forced to withdraw from these markets. HCFA executives continued to maintain that program funding is adequate, and have announced an expedited process for approving plans which would provide coverage in the areas affected by the withdrawals. In spite of HCFA's reassurance, it certainly appears that the Medicare+Choice program has been less than a resounding success.

HCFA Administrator Nancy-Ann DeParle cautioned beneficiaries that they do not need to do anything until they receive an official letter from their HMO in October, and that they will have coverage under their current HMO until January 1, 2001. However, it is not too early for affected beneficiaries to begin educating themselves about their rights and the alternatives available to them.

HCFA will post a detailed list of HMO withdrawals in all affected areas by July 10 on http://www.medicare.gov, as well as information for beneficiaries about next steps and alternatives. HMOs4Seniors has posted some additional information about plan withdrawals and beneficiary alternatives at http://www.hmos4seniors.com/briefing2.htm. Watch for more information in upcoming issues about Medicare HMO beneficiary rights and alternatives.