Seniors Urged To Review Their Options –

What Will Happen When The HMOs Drop Medicare Coverage?

By Jan Howard

Local seniors are advised not to wait much longer to decide what they will do when their HMOs cease providing Medicare coverage on December 31.

On September 13, Eric S. Rodko, MSW, CHOICES regional coordinator of the Western Connecticut Area Agency on Aging (WCAAA), spoke to about 100 Newtown seniors about the HMO bailouts. He offered advice on Medigap policies, possible managed care options for 2001, and how to enroll and dis-enroll in the various options.

 Companies offering managed care plans recently announced they will be withdrawing from Medicare managed care service in Fairfield County by December 31. “There will be no Medicare HMO available in the new year,” Mr Rodko said.

The only possible exception might be PHS Smart Choice, which does not as yet have a preferred provider contract with Danbury Hospital. “This is very uncertain. PHS is still in negotiations with Danbury Hospital,” he noted. “I would presume there will not be another managed plan for you in Fairfield County.

“Hypothetically, even if PHS is able to cinch a contract, they could shut down enrollments because of absorbing large numbers of people from other HMOs,” Mr Rodko said. The shut down could be for an indefinite period of time, he added.

He said if PHS could get a contract, it is uncertain what the prescription coverage would be.

“There is a lot of uncertainty,” he said. “Don’t wait until Thanksgiving to figure out what you’re going to do.”

  He suggested that seniors make a decision by mid-October.

“It is important to know your rights,” Mr Rodko said. “I’m here to help you understand what your options are and where to turn for help and information.”

CHOICES health insurance assistance is a cooperative program of the State of Connecticut Department of Social Services, the regional Area Agencies on Aging, and the Center for Medicare Advocacy. It is funded in part by the state Department of Social Services, the federal Health Care Financing Administration, and the Administration on Aging.

 The WCAAA is funded as a private, non-profit organization to offer information, program development, and advocacy. It cannot sell insurance or pick plans, but does offer volunteers in the community to help people be more informed consumers, he said.

 The HMO decision to withdraw from Medicare coverage does not affect group plans, Mr Rodko said.

Mr Rodko explained the reason for the HMO Medicare bailout is that the companies feel they are not getting enough reimbursement from the government while the government says they are getting too much.

“The HMOs are not going to stick around,” he said. “The marriage between the HMOs and Medicare is in the process of divorce.”

By October 2, the government requires HMOs to send final termination notices to members, effective January 1, 2001. Once the notice is received, members have a special enrollment period during the months of October, November, and December. Members may choose an effective date for enrollment in another managed care plan as of November 1, December 1, or January 1, if another plan is available. They may also dis-enroll back to original Medicare during this time.

“Your job is to get the ball rolling for what you’ll do,” Mr Rodko said.

He encouraged Medicare HMO members not to make any plan changes until all the particulars about the possibility of other Medicare HMO alternatives, including premiums and benefits, are available.

He said members should investigate returning to original Medicare with supplemental (Medigap) coverage. “You will need a supplemental health insurance plan,” he said.

Reeducation is needed, he said, and he urged the seniors to study their Medicare Guide Book to look over what is covered and what is not.

Mr Rodko said under traditional Medicare, as long as a physician accepts it, “You can go anywhere you want.” Ninety-five percent of providers accept Medicare, he added. There is no pre-approval required, and doctors should know what is covered. There is no referral needed to see other doctors. Appealing a Medicare decision is quite easy, he added.

If Medicare is approved, Medigap plans must pick up additional costs, Mr Rodko said. There is no coverage if Medicare doesn’t pay. “Medicare must kick in first,” he said.

Medicare Supplement Insurance, “Medigap,” is necessary for individuals in the original Medicare program because Medicare often covers less than the total cost of the beneficiary’s health care, usually 80 percent of approved charges with a 20 percent cost share by the beneficiary. Medicare Part A also has a hospital deductible for each benefit period. There is no coverage for prescriptions, dental, eye wear, or annual physicals. It is essential to obtain Medigap insurance to cover these gaps in coverage, he noted. 

“The HMOs have been covering these little extras,” Mr Rodko said. “If you want dental and eye wear coverage, you must buy an additional insurance policy. The fringe benefits disappear with the HMOs.”

There are advantages to supplemental Medigap plans, but they are expensive, he said, noting that some Medigap companies can offer additional health coverage but there will be an additional cost per month.

The rates increase with the amount of coverage. “Costs are running an average of $100 to $125 per month per person,” he said. “The more coverage you get, the more expensive it gets. It doesn’t matter what company you choose. It comes down to the rate. You get the same coverage.”

The rate charged is based on risk and the number of people in the plan, Mr Rodko said. “The higher the enrollees, the more costly.”

 The rates will be stable until the end of the year, he noted.

However, he said premiums could rise because 53,000 seniors in Connecticut are losing their managed care. If only 5,000 of them go to a particular insurance company, the price of the coverage will go up, he noted, because of additional administrative costs.

“Premiums could rise 4 and 15 percent a year,” he said. He said companies are waiting to see how many may enroll.  “There’s no telling how high it can go.” The Department of Insurance would not allow rates to double, he said, but rates could rise from 5 to 30 percent.

Why should people take a supplemental plan to Medicare? “Twenty percent co-insurance can rack up quickly in a short time,” Mr Rodko said. “That’s a big risk to take.”

The plus side is that it is easy to get in and out of these plans, Mr Rodko said. “If your company had a high increase, you can change with some ease. To get out is a fairly simple process.”

He noted some people might have options for insurance under group or government plans, such as Veterans of Foreign Wars. “Other groups may have Medigap policies available to you that are competitive” to those offered by insurance companies.

Mr Rodko said, “Double check what the companies are telling you. You have to ask important questions and check them out. Don’t take everything verbatim. Make sure you have it in writing. Know what you’re paying for.”

Medicare beneficiaries of modest means who are having trouble paying Medicare premium, deductibles, and co-payments may qualify for help from the state.

Help is also available to obtain prescription medications, through Medicaid (Title 19), and the State of Connecticut ConnPace program.

For additional information about Medicare options and Medigap policies, contact a WCAAA CHOICES counselor at 800/994-9422.