More than 500,000 elderly and disabled Americans will be dropped from their Medicare HMO plans on Dec. 31, 2001, bringing the total number of beneficiaries who lost their plans during the past three years to more than 1.7 million.

"This dumping of the elderly has been going on so long, it has become passé," says Jamie Court, director of the nonprofit Foundation for Taxpayer and Consumer Rights in Santa Monica, Calif. "What's really troubling is that these elderly have been left in the lurch and the only thing HMOs can tell them is that, 'It must be hard, but it's not as bad as what happened to the victims of the World Trade Center attack.' Nothing in health care is going to get addressed [by Congress] this year."

The number of Medicare beneficiaries who will be affected in 2001 is less than the 934,000 beneficiaries who lost their Medicare HMO plans in 2000. However, more than 90,000 of these beneficiaries live in rural areas where there are no other Medicare HMO plans. They will have no choice but to return to the traditional Medicare fee-for-service program.

What to do

Don't panic if your HMO is dropping Medicare patients, according to elder-advocacy groups such as the American Association of Retired Persons (AARP). You will be covered by your present HMO until Dec. 31, 2001. This gives you some time to find another HMO or enroll in traditional Medicare, although you may have to switch doctors.

New name, new ad campaign

Ever since the Health Care Financing Administration changed its name in July 2001 to the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees the Medicare program has been trying to devise ways to stem the rising tide of defectors from the Medicare+Choice program. Those plans include raising reimbursement rates to hospitals, physicians, and insurers and allowing HMOs to offer Medicare+Choice plans in selected areas of a county, rather than the entire county. This effort also includes a $35 million national media campaign that will be launched this fall to highlight the health care options available to Medicare beneficiaries. Featured in the ad campaign will be the toll-free telephone number of the Medicare call center: (800) 633-4227. The center is now staffed with English- and Spanish-speaking call center experts 24 hours a day, seven days a week. CMS has also introduced Medicare's Personal Plan Finder, an online tool that helps you narrow down your Medicare health plan choices and choose a plan that's best for you. You're asked several questions and the answers are used to provide you with health plan information specific to the region in which you live and your personal situation.

If you choose to return to the original Medicare program, you'll be submitting your health care bills directly to the federal program for reimbursement. Although there is no federal prescription drug benefit with the original Medicare plan, you may purchase a Medigap supplemental policy to augment your traditional Medicare coverage. (See the 10 standardized Medigap plans.)

If you're being dropped from your Medicare HMO plan and you don't decide what to do by Dec. 31, 2001, you will automatically be enrolled in the original Medicare program and will be covered under Medicare Part A and Part B. See Understanding Medicare.

To avoid being overwhelmed by any last-minute decisions, it's best to start thinking now about the benefits you want and how much you can afford to spend. HMO plans and Medigap policies vary in benefits and prices, and both may change from year to year. Do some research and take notes so you can make an informed decision based on actual facts and comparisons.

Your Medicare HMO must have notified you in writing of its decision to drop you no later than Oct. 2, 2001. Keep this letter because it should outline your options and tell you what other Medicare HMOs, if any, will be available to you in 2002.

Medicare HMO beneficiaries are expected to make decisions about their health insurance according to a strict timetable. Important dates in that timeline are:

• Sept. 15 to Oct. 15: CMS mails the 2002 "Medicare & You" handbook to all Medicare beneficiaries.

• Oct.1: The earliest date by which Medicare HMO beneficiaries may enroll in another Medicare HMO.

• Oct. 1 to Dec. 4: Medigap supplemental health insurance policies A, B, C, and F are available on a guaranteed issue basis between these dates.

• Oct. 15: Deadline for Medicare HMOs that are staying with the program to provide notification to enrollees about premium, benefit, and program changes effective Jan. 1, 2002.

• Nov. 1*: Annual open enrollment period begins for the 2002 plan benefit year for all Medicare beneficiaries. *HMO open enrollment may be extended until Dec. 31, 2001.

• Dec. 10: If you want to begin coverage under a new Medicare HMO plan by Jan. 1, 2002, you should complete all the application paperwork by Dec. 10, 2001.

• Jan. 1, 2002: Date when coverage ends for enrollees in Medicare HMOs that withdraw from the Medicare+Choice program.

• Jan. 1 to March 4: Medigap supplemental health insurance policies A, B, C, and F are available on a guaranteed issue basis between these dates.