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Seniors stress, as many HMOs quit Medicare program

There are 38 million senior citizens on medicare. Approximately six and a half million seniors have chosen HMO's because of their low doctor visit co-pays and prescription coverage.  
November 6, 1998
Web posted at: 3:59 p.m. EST (2059 GMT)

From Reporter Louise Schiavone

WASHINGTON (CNN) -- Medicare, the government health insurance program for seniors, is expanding coverage options with a new program called Medicare Plus Choice. The goal is to reduce costs and expand choices, but patients and health experts say it's not happening.

After four year on Medicare, Marilyn Lipowsky says the care has been great but the going has been rough.

"I don't know how we're supposed to do this -- live longer, get less, pay more," she said.

Lipowsky started out on basic Medicare until she couldn't afford supplemental so-called "Medigap" insurance for things such as prescriptions.

The HMO Debate - What Seniors Need to Know Now

She switched to a Medicare managed care plan until that plan withdrew from Medicare, complaining that the government wasn't paying enough. Now she has signed on with a new HMO.

"Where does this leave us?," she said. "What if they all pulled out?"

Of the 38 million senior citizens on Medicare, 6 and a half million have chosen HMOs with their low doctor visit co-payments and prescription coverage.

However, the HMOs are not pleased.

"The payments from the government are not covering the cost of caring for this population group," said Karen Ignagni, president of the American Association of Health Plans.

The government and seniors groups advise seniors to weigh their medicare options carefully.  

The government disagrees, but acknowledges there are problems with the system.

"We're working to put into place what we call a risk adjustment to make sure the payments for each of our individual beneficiaries reflect the expected cost of health care that they will need," said Michael Hash, deputy director of the Health Care Financing Administration.

Still, of the 350 HMOs participating in Medicare, about a hundred are withdrawing or reducing service areas. Just a few new HMOs are signing up.

While some seniors have been able to hook up with new HMOs after their managed care program quit, about 50,000 have no managed care options.

Managed care is not offered anywhere in Alaska, Vermont, Mississippi, Montana, South Dakota, Wyoming or Guam.

"In many communities, there aren't other options and if they try to get back their Medigap coverage, they will find out that either they don't quality for the coverage anymore or they have to pay higher premiums," said James Firman, president and CEO of the National Council on Aging.

The government and seniors groups are advising seniors to weigh options carefully and not to panic.

There's someone out there that's smart and that will know how to figure this out," Lipowsky said.

Meanwhile, basic Medicare remains the most popular option.

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