As New Year Dawns, HMOs Drop Medicare Beneficiaries
As of Jan. 1, 933,687 elderly and disabled people nationwide have been dropped by HMOs that pulled out of the Medicare program. The Health Care Financing Administration, which oversees Medicare, said 65 HMOs were terminating their Medicare contracts and an additional 53 HMOs plan to withdraw from certain counties. Many of these HMOs cite "inadequate government reimbursements" as the reason for exiting the market. The New York Times reports that the Medicare beneficiaries enrolled in HMOs -- who comprise one-sixth of all HMO enrollees -- are "likely to be poorer, less educated and in worse health than others in the program," according to an independent survey by the Mathematica Policy Research, Inc. The survey concluded that this year's Medicare HMO terminations "affected a disproportionately vulnerable subgroup of beneficiaries." The "most severe consequence" of the market pullouts is a loss of prescription drug benefits for about 68% of enrollees. While all Medicare beneficiaries enrolled in exiting HMOs are eligible to return to basic "fee-for-service" Medicare, that program does not cover prescription drugs. In addition, the supplemental or Medigap programs that offer prescription drug coverage are expensive and do not have guaranteed enrollment. Nationally, 31% of those beneficiaries dropped have no other HMO in their area, and 94% of those beneficiaries in rural areas lack an alternative HMO (Thomas, New York Times, 12/31). For more information, please visit www.medicare.gov.This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.