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By Susan Mitchell
June 19, 2000
Illustration: Michael Morales

Aetna U.S. Healthcare is the largest health care insurer in the country, but super-sized doesn’t mean super-healthy. The Medicare+Choice portion of Aetna’s business is poised to cut thousands of seniors from its membership rolls – again.

Aetna announced it would exit the Medicare HMO insurance market in several counties next year, terminating coverage for a "substantial" number of its 670,000 seniors nationwide, the Associated Press reported April 28. Aetna also confirmed its plan to "pull out of some [Medicare] markets," the New York Times reported June 3.

This is not the first time Aetna has left Medicare markets: This year, the company’s pullout affected 17,000 seniors and 62,000 the year before. An exodus in 2001 would affect hundreds of thousands of California and Texas seniors – the bulk of Aetna’s members.

"Essentially, it is becoming more difficult under the current reimbursement structure to offer an attractive plan in certain markets," said Jill Griffiths, spokeswoman for Aetna. "We are in the process of reviewing the markets in which we offer a Medicare+Choice HMO plan. In terms of determining what plans we will continue with in 2001, we’ve made no final decisions."

Griffiths would not confirm whether Aetna definitely will exit any markets, or comment on why Aetna would need to depart or which counties it would leave.

Competitors likewise declined to comment on Aetna’s decision or their own plans. "Over the past year, you’ve seen pretty much across the board every company exiting at least some marketplaces," United HealthCare spokesman Roger Cruzen said.

Money and geography drive the decision making, because reimbursement rates vary by state and by county. HMOs must make final plans for the coming year by July 1, when program changes are submitted to the federal Health Care Financing Administration.

"Our exits over the past two years have been small surgical moves where, unfortunately, we were not able to – due to the payment rates – maintain or attract either doctors or hospitals into our program. Without a network, you can’t take care of patients," said Ben Singer, vice president of public relations for PacifiCare.

Effects on seniors

Nurses worry about the effects on patients. "I think professional nurses’ first concern will be, ‘Will individuals who need health care not get it?’ " said Terry Fulmer, Ph.D., RN, director of the Center for Nursing Research at New York University. The departure of some health plans may cost, confuse and annoy members, but HCFA requires that insurers make sure seniors have a continuity of care plan.

Tara Mahoney, MA, GNP, RN, and physicians at Mount Sinai Medical Center in New York City decided the hassle of covering one another when not all the physicians were providers wasn’t worth the revenues. They pre-emptively withdrew their small geriatric practice from a troubled HMO that intended to take about 50 seniors off its rolls. Patients were handed off to colleagues within the hospital, and "the transition was smooth," Mahoney said.

"The health care system, especially for senior care, is unstable now as they decide whether to cover drugs," Mahoney said. "Unfortunately, it’s all dependent on dollars, and that’s not beneficial for seniors, who are left in a bind to afford coverage. That’s not a good place, especially since our older population is the fastest-growing."

The blame game

By passing the Balanced Budget Act of 1997, Congress encouraged seniors to relinquish the freedoms of fee-for-service Medicare and choose from HMOs, said Mohit Ghose, spokesman for the American Association of Health Plans. Soon, senior HMO enrollment surged as HMOs were found to offer better benefits than traditional Medicare.

Ghose said many seniors in Medicare+Choice HMOs have not had to pay extra for physician visits, prescription drugs or eyeglasses until recently, when plans such as PacifiCare Secure Horizons raised premiums, implemented co-pays and capped prescription drug use to close the payment gap between costs and reimbursements.

The legislation looked good, Ghose said, but cut too much, saving twice what it was supposed to, and hitting providers and insurers hard.

But the law doesn’t deserve all the blame. Cruzen pointed to increases in costs of health care, pharmacy costs, and new and expensive technology. Fulmer depicted "a complex system under enormous duress given the huge changes that have gone on over the past five years. I don’t believe in pointing a finger at one particular juncture."

Solutions not apparent

Amendments to the law and proposals to spend billions of dollars during the next five years are under consideration to "stem the tide of forced withdrawal," Ghose said.

He believes Congress must shore up payments to physicians and hospitals while keeping its contract "to continue to give seniors the care they need, the benefits they deserve, and the higher level of benefit that Medicare+Choice health plans have been consistently giving seniors until the past year."

Fulmer sees no answers. "We do know that the American public has great concern about the way their health care is being paid for and that they have traditionally had a very tight and satisfactory relationship with their physicians and nurses," Fulmer said. "I believe systems such as the HMOs will ultimately bear the burden of public outcry when it comes to those patients not getting the care that they believe they have earned."