Sunday, July 16, 2000

Dropped by HMOs, seniors left in the lurch

Thousands face tough health coverage choices

By Tim Bonfield
The Cincinnati Enquirer

        At age 79, Mary Jo Shelton expects to deal with her share of health troubles. She still sees her doctor for a stroke she had two years ago. She takes pills to thin her blood, others to bring her high blood pressure down.

(Steven M. Herppich photo)
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        But the Medicare HMO mess is something she never expected, the Clifton woman says.

        “Where am I supposed to call? What am I supposed to do?” she says. “I didn't think I'd have to worry about this, but I do.”

        Mrs. Shelton is among nearly 27,000 Greater Cincinnati seniors who will lose their Medicare HMO coverage by year's end. Faced with rising costs and diminished profits, PacifiCare, Humana and Aetna U.S. Healthcare are quitting the Medicare HMO business here.

        The departures leave 40 percent of the Tristaters who use Medicare HMOs scrambling. They face a tangle of red tape to replace their health care coverage, and it could cost each senior hundreds to thousands of dollars more a year.

        Hardest hit will be seniors with chronic illnesses and limited incomes — those who were especially attracted to health maintenance organizations offering low-cost prescription drugs.

        “This doesn't just affect "older people. This affects our parents and grandparents,” says Robert Logan, chief executive of the Council on Aging of Southwestern Ohio. “When are we going to wake up to the fact that this is a family issue that affects us all?”

        Medicare HMOs are a good idea, he says. Seniors 65 and older can enhance their government-paid Medicare coverage by joining HMOs that provide services from a limited network of hospitals and doctors. The hospitals and doctors, in turn, provide care at discounted fees.

        “But the way they were set up, they were destined to fail,” Mr. Logan says. “The system needed to be modified, but nobody would do it, so it fell apart.”

        The demise of three of Cincinnati's five Medicare HMO providers is one more shift in the nation's rapidly changing health care industry. For the Tristate's oldest citizens, it hits at just the time they need reliable health care most and can afford the costs of rising prescription drugs least.

        Cincinnati seniors Paul and Elizabeth Bird turned to Medicare HMOs mostly because they couldn't get affordable prescription drug coverage anywhere else.

        Mrs. Bird, who is 64 but qualifies for Medicare because of her disabilities, takes medications that cost about $200 a month. But Medicare, which pays 80 percent of doctor and hospital bills, does not cover the cost of prescription drugs. And her medication costs about 14 percent of the $1,400 a month the couple collects in combined Social Security and pension benefits.

(Michael E. Keating photo)
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        Mr. Bird, 79, was covered by PacifiCare. Mrs. Bird was with Humana. Now, the couple who live at the Clifton Senior Multiservice Center, must make new arrangements.

        Next year, the only HMO choices for Cincinnati seniors will come from Anthem Blue Cross and Blue Shield and United HealthCare. Each assures seniors that it can take on enrollees who've lost coverage elsewhere. But some, including the Birds, remain unconvinced.

        “We're stumped as to what to do. We're not too sure about any of them now,” Mr. Bird says.

        United can handle as many displaced enrollees as want to sign on, says Ken Hoverman, top local executive.

        And Anthem officials say they can absorb at least several thousand new members. Discussions are just starting on whether enrollment eventually will be capped, spokesman Joe Bobbey says.

        For seniors still interested in Medicare HMOs, answers to the biggest questions — how fees and benefits will change — will remain unknown for several months. Neither United nor Anthem officials say they can reveal details before a mid-September filing deadline set by Medicare.

        If history provides any guidance, the news won't be good. Last year, after Medicare HMOs dropped 700,000 members nationwide, several Cincinnati plans slashed drug benefits and raised co-payments for various services. Some increased monthly enrollment fees from $10 to $39.

        Maria Fresquez, 80, another resident of the Clifton senior center, is a member of Anthem's HMO. She's worried even though her HMO will stay in town.

        “Anthem is still going to be around, but the problem is the costs of medicine keep going up and your allowance keeps going down,” Mrs. Fresquez says. “I'm on five different medications that I can't afford not to take.”

        Medicare HMOs emerged in the mid-1990s as a way for the government to gain some of the cost control that managed care health plans already had brought to the corporate world.

        In return for giving up some of their choice in hospitals and doctors, HMO enrollees would get $5 office visits and an array of free and low-cost extras. Included were prescription drugs, routine physicals, dental exams and vision checks.

        Before HMOs came along, seniors could get such benefits only by purchasing the most expensive “Medicare-supplemental” plans. For example, a 65-year-old in Greater Cincinnati would have to spend $1,800 to $2,300 a year to buy Plan I, one of only three standard Med-sup plans that offer drug benefits.

        Medicare HMOs proved popular in Greater Cincinnati. Enrollment swelled from one plan with 2,200 members in 1995 to six plans with 37,000 members by the end of 1997. By the end of 1999, membership had grown to 65,000 seniors in five plans.

        Medicare HMOs were such a good deal that they even won endorsements from Consumer Reports.

        “I had no problems,” says Dorothy Abt, an 81-year-old resident of the Clifton center. “I've had to be in the hospital a few times. They covered everything.”

        But then Congress changed the rules.

        The Balanced Budget Act of 1997 imposed a five-year, 2 percent a year cap on rate increases for Medicare HMOs. With the cap in effect, HMOs could no longer put up with an arcane county-by-county funding formula that pays far more in some parts of the country than others.

        Ever since, Medicare HMOs have steadily dropped seniors in low-reimbursement counties.

        Despite the rapid growth of Medicare HMOs, more than two-thirds of Tristate seniors never did sign up. After seeing their friends and neighbors suffer through years of instability, some seniors say they're glad they didn't join.

        Edna Bremer, 85, of Clifton says Medicare and a supplemental Blue Cross plan have provided good care for her.

        “I love it right where I am. I think people have been shifting around too much,” Mrs. Bremer says.

        Jerry Ransohoff, who teaches classes on senior issues at the University of Cincinnati's Institute for Learning in Retirement, says: “I wouldn't touch a Medicare HMO with a 10-foot pole.

        “I've got straight Medicare and AARP (a Med-sup plan offered through the American Association of Retired Persons). I've had chest surgery and abdominal surgery, and they paid for all of it. I go to the doctor of my choice.

        “Of course, I can afford it. Some people can't.”

        Affordability is a critical issue, says Dave Scharfenberger, administrator for the Working in Neighborhoods Senior Action Coalition.

        The departure of three Medicare HMOs “throws a lot of seniors up in the air,” Mr. Scharfenberger says. “We've already heard a lot of complaints about the reductions in prescription drug coverage. This is just going to create more problems, more financial burdens for seniors.”

        Jean Timberlake, a 67-year-old Roselawn resident, is among those to be dropped by Aetna U.S. Healthcare. She says the government has to do something to improve health care coverage for seniors.

        “It's a really, really serious problem,” she says. “You work all your life, then you retire and you can't afford the medicine you need. It's terrible.”

- Dropped by HMOs, seniors left in the lurch
HMOs: Learning your options

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