Perspective               

Study Finds HMOs Leave Medicare Despite Higher Payments

For the past two years, Congress has increased payments to Medicare HMOs to encourage them to stay in the Medicare program and in the hopes that they would use some of the money to improve and expand benefits. However, a recent study by the General Accounting Office (GAO) reported that increased payments to Medicare HMOs have not resulted in improved benefits or increased availability of Medicare HMOs.

Originally most Medicare HMOs said "some or all" of the additional money would be used to improve benefits. But, the GAO study found that only about 29 percent have actually improved benefits. In fact, many HMOs have been cutting benefits and raising premiums and copays over the last several years.

In addition, the payment increases have "had little effect on the availability" of Medicare HMOs according to the GAO study. Since 1999, the proportion of people with Medicare living in a community with no HMO option has risen from 28 percent to 36.5 percent. And, Medicare HMOs have dropped more than 2.2 million older and disabled Americans since 1999. At the close of 2001 alone, 536,000 people will be affected by HMO withdrawals from the Medicare program.

If your HMO is leaving Medicare, raising its premiums and copays substantially, or cutting benefits and you want to switch to Original Medicare in January 2002, you have a right to buy Medicare supplemental insurance no matter where you live and regardless of your health status. For more information, you should call your State Health Insurance Assistance Program, or SHIP. The number is listed in Medicare and You.

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