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HMOs Dropping Medicare Affects 327,000

In this column: Why HMOs drop Medicare...What areas are affected...Protections for people on Medicare and getting more information.

October 12, 1999 -- In the health care industry, saving money and saving lives can seem almost synonymous to people affected by cost-saving measures. The pairing of health maintenance organizations and Medicare has been effective for both organizations and has allowed patients access varied services.

But despite the benefits, every year HMOs decide to pull their services out of the voluntary program, mostly for monetary reasons.

"It ends up costing HMOs money to provide service to rural areas, which are grouped by zip code, because the pool can be so small," says Connie Seeley, health care analyst for the Oregon Legislature's Senate Democratic Leadership Office. "Imagine a small town, with 1,000 people and four people get cancer. There just aren't enough healthy people to support the costs for those four sick people."

Medicare is the federally funded program that provides health insurance to people age 65 and over and certain people with disabilities. This year, the withdrawals will affect 327,000 elderly and disabled people in nearly every state during the coming millennium beginning January 2000.

Click here for a list of areas affected in selected states.

According the Health Care Financing Administration, the federal agency that governs the insurance program, HCFA can't force an HMO to continue contracts.

Americans who have depended on the Medicare+Choice plan will still be covered by original Medicare, and other managed care options like Medigap are available. Check the Medicare site for more specific information about what Medicare covers.

If your health coverage will be affected by HMO withdrawal, you should have received a letter from HCFA. You still have several resources to use to answer any lingering questions and to help you make new health care choices:

And keep these tips in mind:

Have you had trouble finding affordable health insurance? Send your questions and anecdotes to HMO Headaches at insurance@ibsys.com


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