Medicare Recipients Struggle With HMO Cuts

Lawrence Walton is a frustrated man.

Laid off from a meat-processing plant in 1985, he went without health-care coverage for nearly 10 years--until he became old enough to qualify for Medicare. Now, suffering serious foot problems, Walton has to tread through a maze of changes in the system of medical coverage for the elderly.

“You don’t know what’s hidden behind all these doors, and you’re damned confused,” said Walton, 69.

Medicare is the federal program that provides health-care coverage to Americans 65 and older and the disabled. It usually covers about 80% of doctor and hospital bills. Many of the 39 million Medicare beneficiaries buy supplemental or “Medigap” insurance to cover the rest.

In recent years, some beneficiaries have left Medicare and joined private health maintenance organizations, or HMOs, to try to save money. Most HMOs offer more benefits, often including prescription-drug and dental coverage, and lower out-of-pocket costs than the Medicare system, in which doctors’ bills go directly to the government.

In 1997, Congress and President Clinton agreed to hold down payments to HMOs to prop up the cash-poor Medicare program. As a result, some HMOs announced that they will stop serving the elderly and disabled in 1999 in parts of 30 states where costs are high or customers are scarce.

Congress allowed the HMOs to terminate their service Dec. 31 based on rules established by the federal agency that oversees Medicare.

Those beneficiaries opting to return to traditional Medicare can keep seeing their current doctors, but deductibles, co-payments and coverage gaps--most notably, no prescription-drug benefit--will be bigger than in an HMO.

Walton said he bought supplemental insurance several years ago to pay for medical costs not covered by Medicare, but the premiums became too expensive. So he joined Anthem Senior HMO, which meant no premiums but restricted him to a designated group of doctors and hospitals.

Last spring, Walton was told the Anthem HMO was withdrawing from his area and he would have to find other coverage. So Walton enrolled with Medicare Extra HMO, which required him to switch doctors. Later, Walton learned that Medicare Extra was also withdrawing.

“I just got on it,” he recalled. “I just went to this doctor.”

Walton then applied to MediGOLD, which would have meant yet another change in doctors. He later decided to just buy his own supplemental insurance at $83 a month so he could choose his own doctor and be assured of coverage. He said he just couldn’t be sure that HMOs would be there for him.

“You can ship them down the road, just to be polite about it,” he said. “I have no confidence in them at all.”

Federal authorities anticipated the confusion that would come from HMO cutbacks and began testing ways to give those on Medicare objective information on alternatives to the traditional Medicare program.

A “Medicare & You” handbook has been mailed to about 5.5 million Medicare beneficiaries in Ohio and four other states, Arizona, Florida, Oregon and Washington.

“There couldn’t be a better time to tell people what their options are,” especially at a time when companies are withdrawing programs from some counties, said a spokesman for the Health Care Financing Administration, the federal agency that administers Medicare.

The timing of the mailing was dictated by Congress, which required insurers to notify residents of their coverage plans by Nov. 2. But officials from insurance companies that have withdrawn programs in some Ohio counties say there’s a risk the booklet will leave beneficiaries more confused.

“It is very complicated,” said David Amerine, director of Medicare programs for United Health Care of Ohio, which is withdrawing HMOs from several Ohio counties as of Jan. 1.

Among the programs detailed in the book are medical savings accounts and provider-sponsored organizations that are run by doctors and hospitals instead of insurance companies.

Those options are not available yet in Ohio, but senior citizens may not know that, Amerine said.

“Beneficiaries are going to be confused,” he said.

Walton said the booklet didn’t help him.

“When I got it, I had already signed up for a supplement. But it didn’t change my mind,” he said.

Barb Connor, spokeswoman for Senior Information Service, an arm of the private Senior Resource Connections of Dayton, said she was surprised at the lack of telephone calls she had received about the booklet.

“We keep thinking we’ll be deluged with calls, and we haven’t gotten them,” Connor said. “I really feel that people are reading it, not understanding it and not going much further with it. They may not even read it. They may not realize they are opening up different options.”