Seniors Get Help From Insurance Industry on Canceled Health Plans

About 4,000 elderly California residents, notified last week that their health insurance will be canceled Jan. 1, won’t be left temporarily stranded, health and insurance industry officials said this week.

Several insurance companies in Orange County and elsewhere have indicated that they are willing to insure the 4,000 clients of Health Plan of America in Orange without the usual waiting period, which can be up to six months, HPA Vice President Eleanor Brewer said. While the clients’ Medicare coverage will continue automatically under a new law enacted in April, their supplemental insurance--costs not covered by Medicare--had posed the problem.

About 1,800 of the affected beneficiaries live in Orange County, with a small number in Los Angeles and Riverside counties and the rest in the San Francisco area.

Supplemental Coverage

Their policies with Health Plan had included both Medicare coverage and supplemental coverage. But the company, one of seven across the country to drop its Medicare contract with the federal government next year, said clients’ medical bills far exceeded Medicare reimbursements.

Marlene Daly, a spokeswoman for the U.S. Health Care Financing Administration, said that Health Plan of America will supply her agency with the names of the affected clients by mid-December. Those who have not found other insurance will at least be reinstated to Medicare automatically, she said.

John O’Hara, another spokesman for the federal agency, said: “What we’re trying to do is emphasize that the patients will still have their regular Medicare program and try to avoid the general feeling that somehow they’ve lost their Medicare benefits.”

In addition, three firms have expressed interest in providing the supplemental insurance that most seniors require, Brewer said, including Texas-based United American Insurance, which will waive the normal six-month process and provide immediate coverage. Brewer said information about United American and other firms will be provided on a hotline, (800) 447-2669, set up for beneficiaries.

A number of other health maintenance organizations in Orange County have indicated a willingness to provide complete insurance for former Health Plan of America members, including both supplemental and Medicare coverage. That information also will be provided via the hotline.

‘Really Good Response’

“We’re getting a really good response from the private sector,” said Bruce Millis, an aide to Republican U.S. Sen. Pete Wilson, who became involved in the issue last week.

Wilson and several health industry officials had called for the Health Care Financing Administration to assist the seniors, thinking that they would be left with no medical insurance at all. But Daly said that had been a misconception, and those people weren’t aware of the new Medicare law.

Millis said Wilson is still considering legislation that would require insurance companies to give clients 120 days’ rather than 60 days’ notice of cancellation.

Millis said Wilson still hopes to see something done for seven seniors who present special cases and may not qualify for Medicare benefits under federal regulations. Those seven, he said, are recently naturalized citizens who “simply didn’t work long enough to qualify.”

Health Plan of America is owned by the Sisters of St. Joseph, a Catholic organization that also runs St. Joseph Hospital in Orange.