MEDICARE HMOS: More Market Pull-Outs, Higher Drug Co-Pays
PacifiCare Health Systems Inc. announced yesterday that it will pull its Secure Horizons Medicare HMO from three California counties and nine Ohio, Oregon and Washington counties, the Bloomberg/Los Angeles Times reports (7/1). Today is the deadline for Medicare HMOs to file year 2000 coverage plans with HCFA, and for the second time in less than a year a number of giant national plans announced plans to drop coverage in markets across the country. At the same time, plans will cut back their prescription drug coverage, raise co-payments and deductibles and ratchet down other annual benefits. The changes could lend "new urgency to the debate in Congress" over including a prescription drug benefit in the traditional Medicare program, the Los Angeles Times reports (Rosenblatt, 7/1). The HMOs are blaming the retreat and strict spending limits on the widening disparity between federal reimbursements for treatment and the costs of care.
PacifiCare, the nation's largest Medicare HMO carrier, said yesterday that it is pulling Secure Horizons from Merced, Mariposa and Madera counties, which represent 1.7% of the insurer's 991,000 Secure Horizons members (Bloomberg/Los Angeles Times, 7/1). PacifiCare President and CEO Alan Hoops said, "We don't like to lose members, but in light of decreased payments from the federal government to Medicare HMOs, we have been forced to make changes in certain markets. If Congress does not adequately address the current disparity, consumers will ultimately be left with fewer choices for Medicare." The 16,400 enrollees affected by the retreat will have until the first of the year to find a new plan. Some 732,600 Secure Horizons members in the remaining markets may see increases in monthly premiums and co-pays, reduced benefits and capped prescription drug coverage, where it exists (PacifiCare release, 6/30). Los Angeles-based Foundation Health Systems said it will drop its Medicare HMO product in some markets, but "refused to say where among the many states it serves that it will cut." However, it did say it would "drop about 5% of its 283,000 Medicare enrollees in 2000, the AP/Orange County Register reports (Galewitz, 7/1).
Everybody's Doing It
A Kaiser Permanente spokesperson said yesterday that the drug co- pay, currently between $5 and $15 for its Medicare HMO enrollees, will see up to a $5 increase. Co-pays for doctors visits, currently $5 or $10, will also increase by $5 (Los Angeles Time, 7/1). In addition, Kaiser will lose 23,400 members when it sells its Northeast division. Humana Inc. will leave 31 counties in seven states -- Arizona, Nevada, Texas, Kansas, Illinois, Wisconsin and Florida (Appleby, USA Today, 7/1).
"This program is in a crisis," said American Association of Health Plans President Karen Ignagni. In the wake of the Balanced Budget Act of 1997, she said, reimbursements are simply not keeping pace with the rising costs of caring for Medicare patients (Rundle/Jeffrey, Wall Street Journal, 7/1). "It seems virtually every Medicare (HMO) beneficiary will be affected by some type of cutback," she said. Medicare HMO members, who will be covered through their plans until Jan. 1, will not lose coverage. If seniors do not opt for another Medicare HMO, they will be automatically enrolled in traditional Medicare (AP/Baltimore Sun, 7/1).