Aetna Medicare HMOs to stop in six states

Maryland Watch

September 02, 1998

Aetna Inc., the largest U.S. health insurer, said yesterday that it will stop offering its Medicare health maintenance organization plans in six states, including Maryland.

The company said it decided to end its participation in Medicare HMOs in some areas when it determined it could no longer afford to offer certain benefits, such as reimbursement for prescription drug costs. The decision will affect 58,000 customers, said Hartford, Conn.-based Aetna. The other states are Delaware, Massachusetts, New Hampshire, Rhode Island and Virginia.

Aetna said it also will withdraw from Medicare HMO plans in Washington, D.C., and some counties in California, Connecticut and Florida, but will continue participating in Medicare HMO programs for 46,000 members in 16 states.

Aetna is the latest health insurer to announce cutbacks in its Medicare plans amid rising health care costs since the 1997 federal balanced budget law sharply cut the overall growth in Medicare payments to health insurers.

The changes have made it more difficult for managed care companies to make a profit on Medicare plans.

Pub Date: 9/02/98

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