December 3, 1998 01:15 a.m. EST
Copyright © 1998 Nando Media
Copyright © 1998 The Associated Press
DENVER (http://www.nandotimes.com) -- On the eve of the federal government's scheduled expansion of health care choices for Medicare beneficiaries, many are finding that they'll have fewer choices, not more.
In part, this is because many of the options scheduled to debut on Jan. 1 under the Medicare+Choice plan, such as preferred provider organizations and medical savings accounts, won't be available on opening day.
But more unsettling for many Medicare beneficiaries is that their current Medicare health maintenance organizations (HMOs) are dropping coverage. Beneficiaries who are being dropped by plans have some tough decisions to make by the end of the year.
According to the federal Health Care Financing Administration, Medicare HMOs are dropping over 400,000 beneficiaries by the end of the year, and 50,000 beneficiaries won't have any other Medicare HMOs to join in their area.
"In the wake of government regulations to keep Medicare costs from rising too fast, many Medicare HMOs aren't finding it profitable to stay in business," says Sam Van Why, an academic associate at the College for Financial Planning.
Medicare HMOs that are dropping service this year were required to notify their enrollees by Nov. 2. If you haven't received notification, you should be all right for another year. You may want to check with your HMO just in case word failed to reach you.
If you are a beneficiary who has been dropped, or you're concerned that your Medicare HMO may drop service within the next year, Van Why says you have several options to carefully consider.
First, he stresses, it's important to realize that everyone who loses their Medicare HMO coverage will still be covered by Medicare. That coverage may be with another HMO or under the traditional fee-for-service program (currently called the Original Medicare Plan).
Most HMO beneficiaries joined their Medicare HMO because they felt it was a way to get better coverage for less money than the cost of traditional Medicare, which has co-payments and deductibles and doesn't cover things like out-patient prescriptions.
"Consequently", says Van Why, "if you've been pleased with your current HMO you will probably want to look at another HMO if one is available. With some restrictions, you are guaranteed access to another Medicare HMO regardless of your health."
The first restriction is that to enroll in a new HMO after Jan. 1, you must be entitled to Medicare Part A as well as Part B. Second, beneficiaries who have permanent kidney failure may not enroll in another HMO unless it is offered by the same organization that now covers them.
If you don't have another HMO to join, or you choose not to join one, you will automatically be enrolled in the Original Medicare Plan at the start of the new year.
You can also apply for a Medigap policy, which covers some or all of the costs not covered by Medicare. If you apply for Medigap by March 4, you are guaranteed access to four of the 10 standardized Medigap plans -- A, B, C or F. These plans cannot turn you down on the basis of your health or if you are under the age of 65.
The problem with these four guaranteed plans is that none of them cover prescriptions, according to Van Why. He also emphasizes that if you terminate your current Medicare HMO before the end of 1998, you are not guaranteed access to these four plans.
If you owned another Medigap plan with better features prior to switching to a Medicare HMO, your return to that plan may be guaranteed. This is the case if the plan is available, you have belonged to only one HMO plan since you left the Medigap plan, and you have been in the HMO no longer than one year.
Van Why stresses considering your options carefully and having a plan in place by the start of 1999. If other HMOs are available, see which services, costs and limitations they have. Many HMOs don't provide service outside of their area, except for emergencies or urgent care. This can be a problem for retirees who divide their time between two areas.
If you decide to rejoin the Original Medicare Plan and buy a Medigap policy, compare policies. Identical standardized plans can vary considerably in cost between companies, Van Why says.
For more information on the termination and availability of Medicare
HMO plans in your area, Original Medicare Plan, and Medigap plan options,
Van Why suggests these resources: "The 1998 Guide to Health Insurance for
People with Medicare" and "The Medicare Handbook," both available by calling
800-638-6833; your state insurance department, state health assistance
program or a senior center. Also try http://www.medicare.gov.