Week in Review : MAJOR EVENTS, IMAGES AND PEOPLE IN ORANGE COUNTY NEWS : CITIES : HMO to Drop Medicare Contracts With U.S.

Health Plan of America, based in Orange, announced last week that it will not renew contracts with the federal government to provide insurance for elderly clients in return for Medicare reimbursement.

That announcement means that more than 4,000 elderly Californians could be without medical insurance for as long as two to three months. U.S. Sen. Pete Wilson (R-Calif.), who said six other health maintenance organizations across the country have made similar announcements, sent a letter to Dr. William Roper, administrator of the U.S. Health Care Financing Administration calling for:

- A task force of medical industry experts to study the problem and make recommendations on interim coverage for the elderly people affected and changes in regulations to avoid further problems.

- Establishment of a toll-free hot line with information on how beneficiaries can find alternative insurance, sign up directly with Medicare and locate supplemental insurance coverage for Medicare co-payments.

The beneficiaries of Health Plan of America who don’t find other insurance by Jan. 1 automatically will be reinstated to Medicare, said Margaret Shea, director of California Medicare Review Inc., an organization that monitors HMO operations. However, they will face a two- to three-month waiting period because of a time lag in Medicare computer files, she said.