While President Clinton seeks to give Medicare beneficiaries access to affordable prescription drugs, many seniors may not be getting those drugs through an HMO.
Last week alone, nine health plans dropped coverage for 162,000 beneficiaries in 16 states, beating the July 1 deadline for withdrawing from the Medicare+Choice program next year. Including previous exits this year, a total of 250,000 seniors will be seeking new coverage beginning Jan. 1, 2000, when the pullouts take effect.
Last year, 400,000 beneficiaries in Medicare managed care lost coverage.
Clinton's proposed Medicare reform measures include a prescription drug benefit, but no relief from the Balanced Budget Act of 1997 cuts, an oft- cited reason for the health plans' exits. Virtually all the health plans blamed HCFA for their decisions, citing regional inequities in the reimbursements they receive. Many of the plans claimed those gaps were widened by payment changes wrought by the budget act, forcing them to leave the lowest-paying regions.
Nine markets will lose two Medicare risk HMOs apiece, including retiree-rich Tucson, Ariz. (See chart).
Karen Ignagni, president and chief executive officer at the American Association of Health Plans, the national HMO lobby, slammed HCFA at a news conference on the pullouts. "I'm shocked at how many seniors will be affected by this," she said. "The policy implementation over at HCFA has put this program into crisis."
Ignagni also criticized a Government Accounting Office report contending that Medicare overpaid HMOs $1.3 billion last year because of a forecasting error.
"Overpaid plans do not leave programs," she said. "Overpaid plans do not cut benefits."
Louisville, Ky.-based Humana will orchestrate the largest exit, departing 11 markets in seven states, affecting 46,000 of its 480,000 Medicare-risk enrollees.
Minneapolis-based United HealthGroup is exiting seven markets in 13 states-including all of Louisiana, where it has 17,000 enrollees. Altogether, 40,000 United enrollees are affected.
United HealthGroup spokesman Phil Soucheray said the health plan could have stayed in those markets only if it had drastically cut benefits. "If that's what winds up being the case, there isn't much reason for us to stay," he said.
Three Blues plans are also leaving markets: Blue Cross and Blue Shield of Arizona is dropping all its Medicare HMO coverage; CareFirst Blue Cross and Blue Shield is leaving 17 counties in rural Maryland; and Colorado Blue Cross and Blue Shield is departing Boulder and Pueblo counties. Combined, those pullouts will affect more than 29,000 enrollees.
"HCFA has created so many risks that these members don't see the benefits of working as a contractor for the government," said Bill Pierce, spokesman for the national Blue Cross and Blue Shield Association in Chicago. Blues plans in Minnesota, New Hampshire and North Dakota exited Medicare risk programs entirely last year.
Other pullouts announced included:
* Woodland Hills, Calif.-based Foundation Health Systems, whose subsidiaries will exit 32 counties in California, Colorado, Connecticut, New Jersey and New York, affecting 15,900 of its 283,000 Medicare risk enrollees.
* Santa Ana, Calif.-based PacifiCare Health Systems, which will exit 11 counties in California, Ohio, Oregon and Washington state, affecting 17,700 Medicare and 2,400 commercial enrollees.
* New York-based Oxford Health Plans, which will exit Suffolk County in New York, affecting 9,000 enrollees.
* Blue Bell, Pa.-based Aetna U.S. Healthcare, which will leave five counties in California and Ohio, affecting 1,700 enrollees.
Fallout for providers has yet to be determined, but observers in regions where there have been multiple exits did not seem over-concerned.
"We don't anticipate much impact," said Rich Sheehan, spokesman for 197-bed Boulder (Colo.) Community Hospital, where United and Foundation subsidiary QualMed Plans for Health of Colorado are exiting. "Kaiser still remains as a Medicare HMO, and folks can go back to (traditional) Medicare coverage and still use the hospital."
That sentiment was echoed in Arizona, where United and the Arizona Blues are dropping risk plans. "It's not a big deal for providers," said John Rivers, president at the Arizona Hospital and Healthcare Association, the state hospital lobby, "but if you're one of the people who lose their coverage, it's a big issue."
-With Kristen Hallam