Friday, June 30, 2000

Aetna dropping 9,500 local seniors

Medicare HMO's demise part of trend

By Tim Bonfield
The Cincinnati Enquirer

More than 9,500 Tristate seniors covered by Aetna U.S. Healthcare's Medicare HMO will be dropped effective Jan. 1 as part of the company's decision to drop more than 300,000 enrollees in 11 states.

Aetna's departure - the second such pull-out to be announced this month - leaves local seniors with just three Medicare HMO choices next year. In 1997, there were six.

""This is a very tough thing we are doing. But we haven't been able to meet our costs in 2000,'' said Bruce Turner, general manager of Aetna's southern Ohio office. "If these plans are to remain viable, Congress has got to bring reimbursement in line with costs.''

Going into 2000, nearly 65,000 Tristate seniors had enrolled in Medicare HMOs. Aetna's departure reflects the fourth major change in the market since 1997.

• Earlier this month, PacifiCare Health Systems' plans to dump all its managed care business in Ohio affected about 6,300 members of its Secure Horizons Medicare HMO, many of them in the Cincinnati area.

• In late 1998, Anthem Blue Cross and Blue Shield dropped nearly 14,000 seniors in 13 Ohio counties from its Senior Advantage plan. Many local members were hit with higher charges and lower benefits.

• In 1997, the sale of ChoiceCare to Humana Inc. resulted in Humana's Medicare HMO flooding into ChoiceCare's.

Cutbacks in Medicare HMOs are happening nationwide.

At least 711,000 elderly and disabled Americans would be jettisoned by HMOs next year (including Aetna's latest), according to a report issued Thursday in Washington by the American Association of Health Plans, an HMO industry group.

They predicted 2001 closings would double the more than 700,000 beneficiaries already stung by a swarm of HMO pullouts that have plagued Medicare since 1999.

HMOs say Medicare payment limits and regulations enacted by Congress in recent years have made serving senior citizens cumbersome and unprofitable.

""This program has been overregulated and underpaid,'' said Karen Ignagni, AAHP president.

Given the fact that seniors flocked to Medicare HMOs primarily because they offered low-cost prescription drug benefits, the continuing pull-outs may stem talk in the presidential campaign of offering prescription drug benefits for all Medicare enrollees.

""The Balanced Budget Act of 1997 capped increases in our reimbursement from the government to 2 percent a year,'' Mr. Turner said. ""But medical costs haven't been limited to 2 percent increases. Our prescription drug costs have been rising at or near 20 percent a year for three years now.''

Aetna U.S. Healthcare will not renew its Medicare contract next year in 11 states: Connecticut, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Ohio, Texas and Washington. The plan will stay in five states: Arizona, California, New Jersey, New York and Pennsylvania. (But some counties in New York, Pennsylvania and Northern California would be cut).

For those Aetna enrollees affected, notification letters will be sent by July 17. By Oct. 2, Aetna plans to send a more detailed letter explaining seniors' options for 2001, be it finding another Medicare HMO, or re-enrolling in traditional Medicare and buying a supplemental plan to cover out-of-pocket expenses.

Medicare Administrator Nancy-Ann DeParle stressed that those affected by HMO closings can stay in their health plans until the end of the year and should not rush to make a change.

The Associated Press contributed to this report.

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