MEDICARE HMOS: At Latest Count, 99 Plans Dropping Out
While insisting that the program "is not in crisis," HCFA announced yesterday that 99 Medicare managed care plans will either drop out of the program entirely or pull out of certain areas by the end of this year, forcing 327,000 enrollees to find alternative coverage and leaving 79,000 participants with only traditional Medicare, CongressDaily/A.M. reports (Rovner, 7/16). The recent pull out means that within the past two years, 734,000 of the nation's 6.2 million Medicare beneficiaries will have been dropped from the HMO program (Pear, New York Times 7/16). "There's no question our managed care program is strong," HCFA's Michael Hash said, adding that the withdrawals amounted to a scare tactic by HMOs seeking to increase reimbursement rates by forcing a crisis in the program (Appleby, USA Today, 7/16). "Medicare payments are more than adequate to provide Medicare's basic benefits," Hash said, adding that many of the plans choosing to pull out would have received reimbursement rate increases of 2% or more. "[S]o they had other options," he said. (CongressDaily/A.M., 7/16). However, Susan Pisano, spokesperson for the American Association of Health Plans, said, "I don't know what the scare tactics are. If people believe that disruption to the lives of 700,000 people is not a crisis, we don't know what it takes." AAHP President Karen Ignagni added that "today's announcement confirmed that Medicare's managed care program was 'in crisis,'" and that HMOs want to "continue serving" beneficiaries, but "often find that they cannot afford to do so."
The New York Times reports that the pull out will impact 39,000 in New York; 34,000 in Louisiana; 32,000 in Texas; 31,000 in Arizona; 29,000 in Florida; nearly 9,000 in Connecticut; and 6,000 in New Jersey (Pear, 7/16). Maryland and Virginia will see a total of 33,000 people dropped -- nearly 27,000 of whom will not be able to obtain Medigap (Hilzenrath, Washington Post, 7/16).