Sunday, October 31, 1999

Seniors told of HMO cuts

SecureHorizons in transition

The Cincinnati Enquirer

        With all the changes in Medicare HMOs these days, the joke making the rounds among some seniors is that PacifiCare should change its product name to “InsecureHorizons.”

        Indeed, the new century will herald many unpleasant changes for the estimated 65,000 Greater Cincinnati seniors who bought into the Medicare HMO concept. And few will see more drastic change than the 20,000 members of SecureHorizons.

        Several hundred seniors gathered this week in Fairfield to learn more details about how SecureHorizons will be changing next year. Several hundred more are expected to attend similar meetings Nov. 1 in Erlanger, Ky.

        Those seniors are among the thousands who have been getting benefit notices in recent weeks from their Medicare HMO. Boil down the fine print and the message is: Out-of-pocket costs are going up, and benefits are going down.

        Many seniors who joined Medicare HMOs to save money and gain access to limited prescription drug coverage now face paying several hundred more dollars a year in increased premiums and co-payments even as their plans slash popular drug benefits.

        SecureHorizons raised premiums and co-payments, cut its drug benefit in half, and pulled out of Montgomery and Clark counties.

Hospitals drop out
        Beyond those changes, however, several local hospitals decided to dump PacifiCare in a contract dispute. The HMO lost about half its network hospitals with the departure of St. Elizabeth Medical Center in Northern Kentucky and Mercy Health Partners (which had four suburban hospitals before it recently acquired the Franciscan hospitals in Westwood and Mount Airy).

        The changes leave Fort Hamilton Hospital as the only Butler County facility in SecureHorizons and the St. Luke Hospitals in Fort Thomas and Florence as the only choices in Northern Kentucky. Members can still get care at most of the large Cincinnati hospitals

        Several dozen doctors closely affiliated with the St. Elizabeth and Mercy hospitals also will be dropping SecureHorizons. However, some are still negotiating with the HMO. That means some seniors won't find out exactly which doctors are in or out until later this year when they receive an updated physician directory.

        Some seniors are outraged.

        “All the HMOs are trying to rob us,” said Frank Stewart, a Hamilton resident and member of SecureHorizons. “I'm looking at $29 a month for me and $29 a month for my wife and they're cutting my medicine (benefit) to $500. That's a hardship for people on Social Security.”

        For the Stewarts, the new premiums add up to 4.6 percent of their monthly $1,250 Social Security check.

Some prefer plan
        Other seniors say Medicare HMOs still offer a better deal than traditional Medicare and its standard supplemental plans.

        “I shudder at the thought of going back to regular Medicare and being involved in all that government paperwork,” said Helane Reusch of West Chester. “As long as our doctor is still in the plan, we'll go to a different hospital.”

        Hamilton resident Victor Giese was unfazed by news that he would have half as many hospitals and dozens fewer doctors to choose from. The ones still in SecureHorizons will be enough, he said.

        “They aren't going to let you die,” Mr. Giese said. “When I was in the Army, they told you which doctor you were going to see.”

        Nationwide, more than 400,000 seniors learned earlier this year that their HMOs would be pulling out of their markets completely. Many more were affected by benefit changes and fee hikes.

        HMOs point fingers for all this change at Congress, the Health Care Financing Administration (HCFA), and the pharmaceutical industry.

        First, HCFA — the agency that runs Medicare — pays HMOs on a county-to-county basis. This method results in wide disparities in payment rates even for bordering counties within the same metropolitan area. To even out these differences, SecureHorizons decided to charge members different monthly premiums depending on the county in which they live, said Tom Anthony, president and CEO of PacifiCare of Ohio.

        Then, Congress made things worse for Medicare HMOs with the Balanced Budget Act of 1997, which capped future rate increases to 2 percent a year, Mr. Anthony said. That's well under overall medical inflation of about 6 percent a year, and way under the 14 percent spike in prescription drug costs last year.

        Anyone see those TV commercials with that vibrant-yet-gray-haired bowling alley lady talking about protecting Medicare choices and drug benefits? That's the managed care industry spending millions positioning itself as the defender of senior consumers while it lobbies for better reimbursement and against proposals allowing patients to sue HMOs over allegations of denied care.

Drug costs increase
        Jan Riga, PacifiCare's director of pharmacy, said a combination of rising prices and increased usage has driven a 40 percent increase in spending on diabetes medicines and a 60 percent increase in cholesterol drugs.

        “We want you to get and take medications. They help keep you healthy and out of the hospital,” Ms. Riga said. “But the gap (between rising drug costs and HMO payment rates) is very real.”

        Knowing the drug price problems HMOs face, Mr. Anthony said he can't understand how the Clinton administration thinks regular Medicare could ever afford to offer prescription drug coverage.

        Several seniors praised SecureHorizons for the frank talk they heard at the information meetings. A few asked whether even more changes are in store next year for 2001.

        “Depending on the first six months (of 2000), we'll re-evaluate our benefit design and co-payments,” Mr. Anthony said. “Yes, there probably will be further changes next year.”


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