4,000 Elderly Californians Will Lose Health Maintenance Coverage

More than 4,000 elderly Californians could be without medical insurance for as long as three months because of a decision by a Southern California health maintenance organization to terminate a program under which it provides health care at Medicare rates.

Health Plan of America, based in Orange, announced Thursday that it will not renew contracts with the federal government at year’s end that call for it to provide care to elderly clients in return for Medicare reimbursement.

About 1,800 of those affected live in Orange County, and about 60 live in Los Angeles. Most of the rest live in Riverside County and Northern California.

“Many senior citizens are now facing a frightening situation because there just isn’t enough time to find an alternative health-care program before their benefits run out,” Sen. Pete Wilson (R-Calif.) said.

Urges Creation of Task Force

In a letter Thursday to William Roper, administrator of the U.S. Health Care Financing Administration, Wilson called for a task force of medical industry experts to come up with both recommendations for interim coverage and changes in regulations to avoid future problems.

Wilson said six HMOs elsewhere in the country have made similar announcements.

The HMO subscribers were given two months’ notice of the suspension of the company’s Medicare program, as required by the federal government. Wilson said he is recommending that the notice period be increased to at least 90 days.

He also called for creation of a federal toll-free hot line to provide information on finding alternative HMO programs, signing up directly with Medicare and finding supplemental insurance coverage for Medicare co-payments.

The beneficiaries of Health Plan of America who do not sign up with another HMO by Jan. 1 will be automatically reinstated to Medicare, said Margaret Shea, director of California Medicare Review Inc., an organization that monitors HMO operations. They will face a two- to three-month waiting period because of a time lag in Medicare computer files, she said. They also may face difficulty obtaining supplemental insurance to pay for the part of medical bills that Medicare does not cover, she said.

Health Plan of America Vice President Eleanor Brewer said her firm is dropping its Medicare program because of financial losses. She said the program relied on flat fees from Medicare that were not sufficient to cover beneficiaries’ needs.

Although she could not provide specific figures for Health Plan of America, she cited a similar health plan in Illinois that lost about $4 million in six months.

‘I’m Worried’

Brewer said Health Plan of America has set up a toll-free line, (800) 447-2669, to provide beneficiaries information.

“I’m worried that, if the members are waiting for something to happen, they’ll be stuck without coverage,” she said. “Then it’s even more critical. They have to begin the process now.”

In San Francisco, officials at St. Mary’s Hospital and Medical Center in San Francisco said Thursday they were fielding about 100 calls a day from Health Plan members.

In Orange, a spokeswoman for St. Joseph Hospital said calls averaged about 50 a day last week but have begun to level off.