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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