NurseWeek

Medicare recipients may lose out in 2001

Reuters Health
July 10, 2000


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New York. Some of the nation’s largest managed care organizations announced June 29 they intend to stop offering Medicare+Choice products in several markets around the country, leaving hundreds of thousands of beneficiaries seeking a new health plan.

Three of the firms, Foundation Health Systems, Aetna US Healthcare and Oxford Health Plans, said that their decisions were necessary in the wake of inadequate reimbursement from the federal government. The market withdrawals had been predicted by industry analysts and the American Association of Health Plans, the managed care industry’s trade group.

The association released June 29 the results of a survey that showed that more than 700,000 Medicare beneficiaries are likely to be affected by managed care plan pullouts from markets nationwide next year. The survey included 37 plans that represent 85 percent of the 6.2 million Medicare beneficiaries enrolled in managed care plans.

Los Angeles-based Foundation Health Systems said that its subsidiaries no longer would offer a Medicare+Choice product in 18 counties in Arizona, California, Connecticut, New Jersey, New York and Pennsylvania, as of Jan. 1. The action will affect about 19,000 Medicare HMO members, representing 7 percent of Foundation Health Systems’ 259,000 Medicare+Choice members.

"Our need to make changes in benefits and premiums in 2001 is a direct result of government payments increasing at a much lower level than costs of care. While we regret having to make these changes, we must do this to preserve the Medicare HMO benefit in the counties where we will remain in 2001," said Jay M. Gellert, president and CEO of Foundation Health Systems.

"We have been forced to make this decision because of Washington’s inaction in addressing both the long-term financial viability of the Medicare+Choice program and the need for choice in selecting Medicare health benefits," said Peter Haytaian, vice president of government programs at Oxford Health Plans.