4,000 Elderly in Insurance Bind to Be Protected

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

Several insurance companies in Orange County and in Texas have indicated that they are willing to insure the 4,000 clients of Health Plan of America, based in the city of Orange, without the usual waiting period, which can be as much as six months, said Eleanor Brewer, HPA vice president.

While the clients’ Medicare coverage will continue automatically under a 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. The rest are in the San Francisco Bay Area.

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 spokesman for the U.S. Health Care Financing Administration, said Health Plan of America will supply her agency with 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,” he said.

In addition, three firms have expressed interest in providing the supplemental insurance most seniors require, Brewer said, adding that information about United American and other firms will be provided on a hot line, (800) 447-2669, set up for beneficiaries.