Medicare HMO to freeze rolls

CareFirst becomes latest insurer to cut availability to elderly

Health care

June 17, 2000|By M. William Salganik | M. William Salganik,SUN STAFF

CareFirst BlueCross Blue- Shield will freeze enrollment in its Medicare HMO on July 3.

Under Medicare rules, however, people can still join as they turn 65, and the freeze must be lifted for an enrollment period in November.

Coupled with the announcement earlier this month that CIGNA HealthCare will leave the Medicare market in Maryland at the end of the year, CareFirst's decision further narrows the choices for seniors, particularly those seeking affordable prescription drug coverage.

"We are in a crisis," said Rep. Benjamin L. Cardin at a news conference yesterday.

"We have a crisis in Maryland as far as seniors being able to afford prescription medicine."

Many senior citizens joined Medicare health maintenance organizations because the HMOs paid for prescriptions, which are not covered by regular Medicare.

Congress acted to slow the growth of payments to the HMOs in 1997, however, and a number have since increased premiums, reduced benefits or left the market entirely, saying they were losing money.

"Congress went to the market, and the market has failed," said Charles Gerhardt, president of the Maryland Patient Advocacy Group, who joined Cardin at the news conference.

HMOs have to notify the government by July 1 of their plans for next year.

While decisions for next year other than CIGNA's are not yet final, "One thing is clear - it will be worse than it is today," Cardin said.

The Baltimore Democrat used the occasion to push for a Clinton administration proposal to add prescription benefits to basic Medicare coverage.

He also attacked a Republican plan to subsidize private insurance coverage for prescription benefits.

CareFirst's enrollment freeze arose after some doctors stopped participating, said Mary Anne Heckwolf, the insurer's vice president for government programs.

"We've seen some terminations in our medical groups, and we need to make sure we can provide service for our existing members."

CareFirst has been paying many doctors a fixed amount per patient per month, based on a percentage of the amount the government pays the HMOs.

But some large doctor groups have lost money on those contracts, and decided to cancel them.

With 31,000 members, Care- First's Medicare HMO is the largest in the state.

When their enrollments are combined, United HealthCare and Kaiser Permanente Health Plan have about the same number of Medicare members as CareFirst.

CIGNA has 8,100 members, who will have to find new plans by the end of the year or return to traditional Medicare.

Heckwolf said CareFirst has lost $25 million on its Medicare HMO over the past four years.

The losses produced a string of cutbacks - adding a monthly premium and pulling out of rural counties last year, leaving 14,000 Maryland seniors without an HMO option.

But the losses have continued - about $1 million in the first quarter this year. Heckwolf said CareFirst has yet to decide whether and how to offer Medicare HMO policies next year.

Cardin said he thought CareFirst would stay in the program, but continue the freeze. He said he expected United and Kaiser to pull out or to modify premiums and benefits.

State Health Secretary Georges Benjamin also joined Cardin, saying drug coverage had become more important since Medicare was created in 1965. He noted that care has moved from inpatient to outpatient settings, and prescriptions have become more expensive and more important in new treatments.

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