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If you have been dropped by your Medicare HMO, chances are you'll have to pay higher premiums with a new plan or be forced to accept reductions in service. Worse, you might not be able to find a new Medicare HMO plan in your area at all.
"This is often a serious blow to the elderly," says Martin D. Weiss, chairman of Florida-based Weiss Ratings Inc., an independent provider of financial-safety ratings for most HMOs and Blue Cross and Blue Shield plans. "They are left in a quandary and have scant access to reasoned advice, relying primarily on salespeople for guidance."
"This is often a serious blow to the elderly." |
Weiss offers these guidelines if you'll be losing your Medicare HMO coverage:
- Step 1. Dont switch plans until the end of the year. Stick with your existing HMO as long as they will permit the contract to run. If you drop out sooner, your withdrawal will be considered "voluntary" and you will immediately forfeit certain kinds of guaranteed coverage for next year.
- Step 2. Start checking into alternatives immediately. To avoid any coverage gaps and to ensure a spot in a new Medicare HMO, you will want to enroll before your policy stops in a new policy that will take effect immediately after your termination date. Get a list of HMOs in your area, but make sure it is up to date, including new plans that have recently been approved by Medicare. (Contact the Medicare Choices Helpline at 800-MEDICARE.)
- Step 3. Approach HMOs with caution. More than 114 of the nation's HMOs are losing money, 2 have already failed since 1991, and 21 more are judged to be weak. So dont be surprised if many more decide to duck out of this business next year.
- Step 4. Don't be afraid to leave HMOs entirely and shift to traditional Medicare, plus a Medigap plan, regardless of your health status. Under this guarantee, you can choose among four different Medigap plans: Plans A, B, C, and F. Depending on your health, you may also be eligible for six other Medigap plans available. With Medicare and Medigap, its far less likely you will get dropped again. Plus, you will have more freedom to choose your provider or hospital and will benefit from better access to specialists.
Warning: Your last day to take advantage of guaranteed Medigap is 63 days after your HMO coverage ends.
- Step 5. Shop around for the least expensive Medigap policy that meets your needs. The cost of Medigap insurance can vary drastically by insurance provider, even for identical plans offering the same benefits in the same location. For example, a 70-year-old female in Columbus, Ohio, could pay $2,886 for Plan F from Mutual Protective Insurance Co., but only $1,293 if she signed up with Philadelphia American Life Insurance Co.
If the policy that your agent quotes for you is too expensive, dont give up. There could be much cheaper policies available with the same benefits.
- Step 6. Beware of future Medigap premium increases. Before you sign on the bottom line, find out if your insurance company will automatically raise your Medigap premiums as you get older (called Attained Age Pricing). If it does, that may help explain why it's cheaper up-front. For example, United Teacher Associates charges $2,296 per year for a Plan F for a 70-year-old female living in Los Angeles, while Combined Insurance of America charges $2,918 for the same coverage. However, United Teacher Associates will automatically raise rates as you grow older, while any rate increases at Combined Insurance of America will be limited to standard increases that apply to everyone across the board, and will be based on the age you started the coverage (called Issue Age Pricing).
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