Nearly 1.7 million elderly and disabled Americans have lost their Medicare+Choice plans in the last three years and the trend is likely to continue as health insurers dump their most unprofitable Medicare HMO plans. This creates a difficult decision for Medicare HMO enrollees. Should they take a chance on a new HMO only to be dropped yet again, or go back to traditional Medicare without a prescription drug benefit?

A Medicare lock-in provision took effect Jan. 1, 2002. Previously, the Medicare program has allowed people to switch HMOs as often as once a month, throughout the entire year. However, between Jan. 1, 2002, and June 30, 2002, you can switch just once to another Medicare HMO or return to traditional Medicare. After that, you are stuck with your choice for the remainder of the year.

"We don't tell people what to do because each person has a different situation," says Joyce Dubow, a senior public policy adviser with AARP. "Seniors need to be well informed before they make a decision — particularly now."

The regulations will become even tougher in 2003. Beginning in 2003, you will only have the first three months of the year to make a change. After March 31, 2003, you will have to stick with your choice for the following nine months.

"The lock-in is certainly causing a lot of concern," says Dubow. "People are very anxious about the instability in the [Medicare+Choice] program."

Choices

So if you are still a Medicare HMO member, but you are concerned with your future health insurance options, you should know your available choices. Up until June 30, 2002, you can either:

• Return to original Medicare: This choice, often called "traditional" or "fee-for-service" Medicare, helps pay for doctor and hospital care. Original Medicare is always available.

  If you choose this option, you can also buy Medicare supplemental insurance, or Medigap. These are private insurance policies that you buy to supplement traditional Medicare. Medigap offers expanded benefits and coverage for out-of-pocket health expenses, depending on the kind of policy chosen. However, the cost varies widely, as do the benefits. See Medigap insurance: Filling in Medicare's gaps.

• Select another Medicare+Choice plan: These HMO options offer a health care package that may include some benefits not covered in traditional Medicare, such as a prescription drug benefit. If there is another plan that is being offered in your area and it is accepting new enrollees, you can choose to enroll.

Make sure you know what you are getting when you sign up for a plan. Do a side-by-side comparison of the costs and benefits of each plan. Does the plan provide prescription drug coverage? If it does, are there limitations placed on them? Many insurers are raising their premiums and/or cutting back on their prescription drug coverage. Some will only pay for the generic versions of brand-name drugs. For help, use Insure.com's Health plan comparison worksheet.