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Medicare HMOs to drop

HMOs participating in the federal Medicare+Choice health insurance program will drop health coverage for "several hundred thousand" Medicare beneficiaries next year, according to the Centers for Medicare and Medicaid Services (CMS) Administrator Thomas Scully.

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Head start on where to look for help

Medicare posts a fact sheet and list of frequently asked questions about managed care plan withdrawals.

In addition, Medicare presents the costs and benefits of Medicare options in your area and lists insurance companies that sell Medigap plans in your state so you can make side-by-side comparisons.

AARP publishes What to do if your managed care plan leaves Medicare?

Scully made the announcement on Aug. 29, 2001, at a press conference to detail President George W. Bush's plans to stem the rising tide of defectors from the Medicare+Choice program. Those plans include allowing HMOs to offer Medicare+Choice plans in selected areas of a county, rather than the entire county. Additionally, CMS will allow HMOs to negotiate contracts with employers to provide benefits for retirees older than 65 similar to the coverage that they received as employees.

According to CMS, health insurers have until Sept. 17, 2001, to announce whether they will cover beneficiaries in certain markets in 2002. Historically, health insurers have made that announcement in July and have had a deadline of Oct. 2 to notify affected beneficiaries in writing.

At the press conference, Scully said he could not yet say exactly how many beneficiaries would be affected by pullouts, but he added that "it could have been a lot worse." Last year, 934,000 Medicare beneficiaries had to enroll in new health plans or return to traditional fee-for-service Medicare after 115 HMOs withdrew from Medicare+Choice. Medicare HMOs cover 15 percent of the 40 million Medicare beneficiaries nationwide.

At the crux of the crisis are health insurers that say federal reimbursements for health care are too low and low- to moderate-income seniors who enroll in Medicare HMOs because most of them offer low-cost prescription drug coverage, a benefit not available to them under traditional Medicare.

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