At candidate forums held in Florida last month by the American Association of Retired Persons, one of the main topics of conversation was the recent rash of HMOs pulling out of the Medicare program.
According to John Rother, the AARP's director of legislation, research and public policy, most of the beneficiaries' anger was directed at the plans.
"This is a big PR nightmare," Rother said. "What the industry has really done is shot themselves in the foot. They have no credibility as far as (seniors) signing up next year."
But beneficiaries are telling a different story to the American Association of Health Plans, officials there said.
According to AAHP President Karen Ignagni, "We've been hearing for the last month from seniors who are concerned about losing their health plan." Seniors are upset that the government isn't doing more to fix the problems in Medicare, she said.
Meanwhile, HCFA has portrayed the HMO departures as business decisions by the plans. HCFA and the Clinton administration have also been doing what they can to make sure HCFA isn't the object of seniors' ire. For example, after press reports about the HMO pullouts broke around the country, President Clinton held a White House event to announce that HCFA would expedite the entry of new plans into some of the affected areas.
It is clear that seniors are concerned about the Medicare program generally; and in some markets, they are angry about the health plan exodus. However, there is a vast difference of opinion about whom the seniors blame and what it means for the new Medicare+Choice program.
The issue began to unfold in late September and early October when health plans, through the AAHP, asked HCFA to allow them to resubmit some parts of their "adjusted community rates," which detail the plan benefits and beneficiary costs.
The AAHP said that low Medicare reimbursement rates in many areas combined with higher-than-expected costs to implement the Medicare+Choice regulations included in last year's balanced-budget law meant that plans could no longer afford to stay in some markets.
But HCFA denied the plans' request and called their bluff.
In total, more than 40 Medicare risk HMOs announced by an Oct. 2 notification deadline that they were leaving Medicare. An additional 53 such plans said they were reducing their service areas. Twenty-three other kinds of plans, including two provider-sponsored organizations, also said they were leaving Medicare. In total, more than 500,000 seniors were affected (See chart).
Plans say they are concerned about the effect the pullouts will have on their remaining business, especially in areas where they are exiting one county but remaining in an adjacent county. They also admit they are concerned that HMOs' already low popularity will sink further as a result of the bad publicity surrounding the pullouts.
"Sure, it's something we considered before we made the decision," said Humana spokesman Greg Donaldson. "But we're not anticipating any fallout. We're hopeful that we can communicate clearly and effectively with beneficiaries the reasons for our actions."
Humana exited four counties in Florida, affecting about 33,500 of its more than 1 million beneficiaries in the state. Last week, Humana began notifying seniors in those counties by letter.
But others say the plans can't avoid being tarred by the negative publicity generated by their departure from Medicare risk markets.
"I think seniors are mad at the plans, and I don't think there is much (the plans) can do about it," said Peter Fox, a healthcare consultant.
Rother said he believes the effect goes beyond the markets where the pullouts occurred.
"This is pretty profound," Rother said. "Everyone is worried that (their plan) will be next (to cease coverage)."
So far, there has been no polling done to gauge any public anger over the pullouts at either the health plans or the Medicare+Choice program.
However, a recently released study by the Kaiser Family Foundation and the Harvard School of Public Health found that only 20% of those surveyed know anything about the new Medicare+Choice program, including only 24% of seniors.
"I assure you (seniors) hold the plans responsible," said Robert Blendon, professor of health policy at Harvard University. "(Seniors) are the most anti-managed-care part of the population. They are very suspicious."
Blendon said he believed the pullouts will have more impact on the Medicare+Choice program.
"There is absolutely no question about it; this is going to affect the plan in general," Blendon said. "The message to seniors is that this isn't good at all. This will be a problem for the program in the future."