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Archive for Thursday, August 31, 2000

Elderly face tough choices on insurance plans

August 31, 2000

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— Some senior citizens are considering not taking some of their medications. Others are thinking about selling their homes. Some say they won't be able to visit the grandchildren as often.

Around the country, thousands of elderly people are facing a financial crisis: They are being dropped by their Medicare HMOs and losing their prescription drug coverage as a result.

"I am terrified," said Evelyn Thomas, 74, of St. Augustine, Fla., who is pondering not taking some of the nine drugs she uses for diabetes, high blood pressure, depression and other maladies. "I cannot afford to pay for my medicines on my own, and I can't afford to pay for a Medicare supplement that would cover my medicines."

Thomas is one of nearly 159,000 elderly people nationwide who are now enrolled in a Medicare HMO and whose health plans are ending coverage as of Jan. 1 -- leaving them with no option other than returning to traditional Medicare coverage without prescription benefits, or buying expensive supplemental insurance.

Thomas' health plan, Humana Inc., is one of several HMOs reducing their Medicare business because they say Medicare no longer pays enough in reimbursements. The HMOs say they have no choice but to drop the service in unprofitable markets.

Because government reimbursement rates vary by county, HMOs are pulling out of some markets but not others. Areas where fees remain high -- such as Miami and New York City -- continue to have a choice of plans. In places where reimbursement is lower, such as the Midwest and mid-Atlantic states, plans have been quick to leave.

About half the senior citizens losing their Medicare HMO option next year live in Florida, Texas, Pennsylvania and Virginia -- all states with large numbers of people 65 and older.

Without an HMO option, senior citizens must return to the traditional fee-for-service Medicare program, with its higher monthly premiums, no drug coverage and only 80 percent coverage for doctor and hospital costs. HMOs, which generally have zero or minimal premiums, usually pay those bills in full.

Medicare supplemental policies that cover drugs and other costs not covered by the program typically cost $250 to $350 a month.

Overall, the HMOs' departure from Medicare next year will affect 934,000 elderly people, though 83 percent of them will have the option of switching to another health plan. About 6.2 million or 16 percent of the 39 million Medicare beneficiaries are currently enrolled in HMOs.

Responding to the HMO cutbacks, several states such as New York, Indiana and Kansas have created or expanded programs to help the elderly afford prescription drugs. But the efforts are mostly aimed at the poor or offer only nominal assistance.

As a result, it's middle-class senior citizens who are most feeling left out.

Tom Pontarelli, 70, of suburban St. Augustine, Fla., will lose his drug coverage with the departure of Humana next year. His medical costs will rise, while residents in a neighboring county will still have an HMO.

"That is outrageous," said Pontarelli, who takes five drugs, including medicines for depression and arthritis. "The whole system is outrageous."

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