MEDICARE MANAGED CARE: HMO Exodus Hard on Seniors
In the wake of a recent rash of HMO withdrawals from Medicare and service cutbacks intended by many more, a new study by the Kaiser Family Foundation and the Barents Group LLC reveals that "most 'orphaned' Medicare beneficiaries have been able to find new coverage arrangements, but many now pay more and have fewer benefits" (Health Affairs, Nov./Dec. 1999). Published in the November/December issue of Health Affairs, the survey attempts to get a "good snapshot of where people actually landed [after Medicare HMO withdrawals] and the impact" on their benefits, Kathryn Langwell, managing director of the Barents Group Health Economics Practice and study co-author, said. The survey of 1,830 involuntary disenrollees was conducted in March and April 1999, three months after 400,000, or 7%, of all Medicare HMO enrollees were forcibly dropped from their HMOs. The survey found that two-thirds of disenrollees had joined other Medicare HMOs, while the remainder had returned to traditional fee-for-service plans with or without supplemental coverage, such as Medigap. "Medicare beneficiaries, for the most part, weren't totally turned off by HMOs as a result," Langwell observed, noting that 20% of disenrolled seniors had no other HMOs available to them and thus were funnelled into other plans. Additionally, almost 40% faced higher premiums, and over one-third of all disenrollees received fewer benefits. The most common result was that beneficiaries lost their prescription drug coverage, with one in six reporting no drug benefits after the transition. "The findings make it clear that while all beneficiaries are fortunate to have traditional Medicare as a safety net, gaps in the benefit package meant fewer benefits and high cost for many HMO disenrollees," Langwell said. She added that low-income, disabled and those beneficiaries most in need of care were hit hardest by the forced transition. Beneficiaries over age 85, the disabled under 65 years-of-age, older, racial and ethnic minorities, the poor and near-poor and those with poor health were most likely to return to traditional Medicare with no supplemental coverage, and disenrollees with low-income, poorer health and non-Hispanic whites were most likely to lose drug coverage (Health Affairs release, 11/8). Continuity of care was also affected by recent events, the study shows, revealing that 22% of beneficiaries were forced to switch doctors. "Interestingly, though not surprisingly, those who enrolled in new HMOs were more likely to change doctors," Langwell explained, citing differing provider networks as the cause.
Toward Smoother Transitions
According to Langwell, "the 1998 experience was a surprise to many people ... It happened very quickly. People had only a couple of months to adjust" to the news. Earlier announcements of future HMO withdrawals, although still "disruptive," should "offer Medicare beneficiaries the opportunity for a smoother transition," as they will have more time to investigate alternatives, she said. She added, however, that increased regulations and administrative burdens placed on HMOs will lead to more plans leaving the system. "Medicare beneficiaries must understand that the HMO is not Medicare. ... It can drop out. ... They must consider the fact the their HMO may not always be there," Langwell said, calling for better education of beneficiaries on the program and targeted assistance to help them make the transition to new plans (Heather Weaver, AHL, 11/9). Karen Ignagni, president of the American Association of Health Plans, said that the "report tells a compelling and human story about the value of the Medicare+Choice program to our nation's most vulnerable beneficiaries" and provides "further evidence to Congress of the need to move forward and to finish the job of saving" the program for seniors" (AAHP release, 11/8).