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Thousands to Lose Coverage As HMOs Pull Out of Medicare.

Some 711,000 Medicare beneficiaries will lose their health coverage in January as health plans leave behind Medicare+Choice markets, the American Association of Health Plans has estimated.

In releasing preliminary results of a survey of health plans, AAHP President and Chief Executive Officer aren Ignagni said increased costs, stringent federal regulations and a lack of interest among practitioners in the program were driving plans from the Medicare+Choice program.

Plans were required to tell the Health Care Financing Administration by July 3 whether they planned to remain in or drop out of the Medicare+Choice program in 2001.

According to the survey by the association, 18 of 37 responding companies said they would cease operations in at least one or a portion of the counties they currently serve. Fourteen of these 18 companies reported that inadequate payment associated with costs was the driving factor in exiting Medicare+Choice. The report also revealed that 441 of the 1,143 counties in which the 37 respondents operate would lose Medicare+Choice service.

In June, Cigna Healthcare became the first major insurer to announce its intention to exit most of the Medicare+Choice markets it serves. Several other health insurers also have said they would leave Medicare+Choice. They include Aetna U.S. Healthcare, Health Net, Foundation Health Systems Inc., Oxford Health Plans Inc., UnitedHealthcare and Humana.

Lisa Haines, a spokeswoman for FHS, said this was the third year in which the Balanced Budget Act had a negative impact on the Medicare+Choice program, and she doesn't see the situation improving unless Congress takes corrective action. "I can see a repeat" of companies dropping out of the program in the next round of notifications to the government and beneficiaries, she said.

Aetna CEO William H. Donaldson agreed. "If the Medicare HMO program is going to survive and continue to provide beneficiaries with comprehensive benefits, Congress will have to make fundamental changes," Donaldson said.

Medicare+Choice plans offer benefits such as prescription drug and dental coverage beyond what is offered under the traditional Medicare program. Like most managed-care plans, Medicare HMOs are profitable if they can negotiate contracts with providers and control costs so they spend less than they are paid. But how much the federal government pays HMOs varies widely, depending on the location of members.

While the average reimbursement per member per month nationally was $488.45 in 1999, it varied as much as from $676.64 in Broward County, Fla., to $394.42 for Dakota County, Minn.

According to HCFA, Medicare-risk HMOs dropped 327,000 people, or 5% of all enrollees, as of January. In 1999, 43 Medicare-risk HMOs left their markets and 52 reduced service areas, dropping about 400,000 beneficiaries. The number of seniors affected by the exiting plans in 2001 will be about equal to the total for the previous two years, the AAHP report said.

Ignagni said the withdrawals reflect "a funding crisis that demands our immediate attention."

AAHP is lobbying Congress to increase funding for Medicare and Medicare+Choice, as well as increasing grass-roots activities to get more seniors to press their congressional representatives for improvements in the program. This will include local radio and television ads to rally seniors and pressure Congress to provide adequate funding, Ignagni said.
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Comment:Thousands to Lose Coverage As HMOs Pull Out of Medicare.
Publication:Best's Review
Article Type:Brief Article
Geographic Code:1USA
Date:Aug 1, 2000
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