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OIG Assesses Impact of Medicare HMO Withdrawals

Tue, 09/12/2000 - 11:00pm — Karen Stevenson
Description: 

The Office of the Inspector General (OIG) of the Department of Health and Human Services just released a report that assesses the impact on Medicare beneficiaries of the withdrawals of HMOs from the program in 1999. This report does NOT include information about the current withdrawals, which are expected to impact 934,000 beneficiaries this year.

The 1999 HMO withdrawals affected fewer beneficiaries than the 1998 withdrawals (about 300,000 in 1999 compared to about 400,000 in 1998), but a greater percentage of them were left without an HMO option in 1999. 30% of beneficiaries had no HMO available to join after the 1999 withdrawals, up from 12% after the 1998 withdrawals.

Fewer beneficiaries chose another HMO. 55% of the affected beneficiaries joined another HMO in 1999, down from 66% in 1998. Most beneficiaries encountered few transition problems when their HMO withdrew, but about 18% beneficiaries expressed some difficulty, mostly increased cost, primarily related to prescription drugs. Of beneficiaries who went to traditional Medicare, 63% said they would now have to pay for some services which had been covered by their former HMO. Of beneficiaries who joined another HMO, 19% said their new HMO would cover fewer services than their former HMO.

Most beneficiaries said notification of HMO withdrawals was timely and adequate. Beneficiaries viewed their health care to be about the same or better after their HMO withdrew. About 90% of beneficiaries who went to traditional Medicare, and 69% of those who went to another HMO said they kept the same primary care physician, and most beneficiaries also kept at least some of their specialists.

The financial impact was greater on beneficiaries who went to traditional Medicare because most purchased supplemental insurance. The average monthly insurance premium was $108.82 for those who went to traditional Medicare, an increase of $84.06 over what they had been paying in the HMO. The average new HMO premium was $20.27, an increase of $9.08 for beneficiaries who joined another HMO. 69%-75% of those who chose to switch to the traditional Medicare program obtained supplemental insurance. Of those who did not, 55% said it was too expensive.

More than one-fourth of beneficiaries also expressed concern about future HMO withdrawals.

The Office of the Inspector General (OIG) of the Department of Health and Human Services just released a report that assesses the impact on Medicare beneficiaries of the withdrawals of HMOs from the program in 1999. This report does NOT include information about the current withdrawals, which are expected to impact 934,000 beneficiaries this year.

The 1999 HMO withdrawals affected fewer beneficiaries than the 1998 withdrawals (about 300,000 in 1999 compared to about 400,000 in 1998), but a greater percentage of them were left without an HMO option in 1999. 30% of beneficiaries had no HMO available to join after the 1999 withdrawals, up from 12% after the 1998 withdrawals.

Fewer beneficiaries chose another HMO. 55% of the affected beneficiaries joined another HMO in 1999, down from 66% in 1998. Most beneficiaries encountered few transition problems when their HMO withdrew, but about 18% beneficiaries expressed some difficulty, mostly increased cost, primarily related to prescription drugs. Of beneficiaries who went to traditional Medicare, 63% said they would now have to pay for some services which had been covered by their former HMO. Of beneficiaries who joined another HMO, 19% said their new HMO would cover fewer services than their former HMO.

Most beneficiaries said notification of HMO withdrawals was timely and adequate. Beneficiaries viewed their health care to be about the same or better after their HMO withdrew. About 90% of beneficiaries who went to traditional Medicare, and 69% of those who went to another HMO said they kept the same primary care physician, and most beneficiaries also kept at least some of their specialists.

The financial impact was greater on beneficiaries who went to traditional Medicare because most purchased supplemental insurance. The average monthly insurance premium was $108.82 for those who went to traditional Medicare, an increase of $84.06 over what they had been paying in the HMO. The average new HMO premium was $20.27, an increase of $9.08 for beneficiaries who joined another HMO. 69%-75% of those who chose to switch to the traditional Medicare program obtained supplemental insurance. Of those who did not, 55% said it was too expensive.

More than one-fourth of beneficiaries also expressed concern about future HMO withdrawals.