MEDICARE HMOs: Pullout Will Not Affect Majority of State’s Seniors

      A majority of the 1.5 million California seniors enrolled in Medicare HMOs will continue to have flexibility among health plans and adequate access to care next year, despite the departure of some plans from the market, according to a new study by the California Medicare Project, a division of the California HealthCare Foundation. Cigna will discontinue all of its Medicare HMO operations throughout the state, and seven plans -- Aetna, Blue Cross, Blue Shield, Health Net, Maxicare, National Health Plans and UCSD -- will scale back operations in several counties, affecting nearly 57,000 beneficiaries. Still, the study found that 96% of those affected by the pullout will continue to have at least two other HMO options. Merced County, home to nearly 3,100 beneficiaries, will be the only area that will have no other options next year, according to CMP Director Jack Christy. He said, "The stability of the Medicare managed care market in California is due in large part to the fact that the two plans that cover more than 70% of the Medicare managed care market -- Kaiser Permanente and PacifiCare -- are renewing all of their existing Medicare contracts." Those counties in which at least one HMO Medicare contract will be renewed include Alameda, Contra Costa, El Dorado, Fresno, Los Angeles, Madera, Merced, Orange, Placer, Riverside, Sacramento, San Bernadino, San Diego, San Francisco, San Joaquin, San Mateo, Santa Clara and Sonoma. Christy said, "A number of factors go into a health plan's decision to stay in or leave a county -- the willingness of local providers to contract with a plan, size of the beneficiary population and the rate of reimbursement from Medicare. Previous decisions to withdraw were dominated by considerations of the first two factors. For 2001, however, reimbursement rates appear to be playing a bigger role in decisions." California Medicare HMO beneficiaries account for more than 24% of those enrolled in Medicare HMOs nationwide. A copy of the analysis is available at www.chcf.org (CHCF release, 7/21).