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Blue Cross to leave Medicare HMO area By Andy Miller The Atlanta Journal-Constitution, September 09, 2003 Georgia's largest health insurer
is pulling out of the Medicare HMO business, affecting 19,000 metro Atlanta
seniors. Blue Cross and Blue Shield of
Georgia on Monday blamed inadequate reimbursements from the federal
government for its withdrawal from the Medicare program. The 19,000 members will have the
option of joining the remaining HMO serving Georgians in Medicare -- Kaiser
Permanente -- or joining the traditional fee-for-service Medicare program.
Blue Cross said its Medicare services will continue until Jan. 1. Blue Cross is the sixth local
health plan to abandon its Medicare product in recent years. A seventh plan,
Providers Direct, was placed in liquidation earlier this year because of
solvency problems. Nationally, the Georgia Blue
Cross pullout accounts for a large chunk of the projected 40,000 or more
Americans affected by HMO withdrawals for 2004. The projection, by the
American Association of Health Plans, an industry trade group, would be the
lowest such number affected by Medicare withdrawals in the past six years. Monday was the deadline for
health plans to tell their 2004 plans to the federal Centers for Medicare
and Medicaid Services. Medicare is the federal health insurance program for
those 65 and older and the disabled. Charlie Harman, a Blue Cross vice
president, said the company's medical costs have increased 12 percent
annually, while Medicare payments have increased just 2 percent. Harman
added that some hospitals did not want to participate in the company's
Medicare HMO program next year. Blue Cross members will be
notified of the move in the next two weeks, Harman said. The 19,000 are in
eight metro Atlanta counties. "Our No. 1 priority will be to serve our
senior members during this process," he said. Leonard Schaeffer, chief
executive of Blue Cross' parent company, WellPoint Health Networks, has
publicly expressed concern about the Medicare HMO program, including in a
2001 hearing about WellPoint's acquisition of Blue Cross. Kaiser Permanente, which has
14,000 seniors in its plan in Georgia, said Monday that it will continue its
Medicare product next year. It expects premiums for members to increase. Nationally, about 11 percent of
seniors are members of Medicare managed care plans, down from a peak of 15
percent four years ago. "The program has been underfunded for six years
in a row," said Susan Pisano, an AAHP vice president. The remainder use
the traditional fee-for-service program administered by the federal
government. Brent Layton of consulting firm
Layton & Associates said that other markets, such as Florida, have fared
better than Atlanta in Medicare HMO viability. Geographic areas get different
reimbursements, Layton noted. "The [Atlanta] market is large, and the
opportunity is huge, but the federal reimbursement is abysmally low,"
he said. Besides preventive care and lower
out-of-pocket costs, health plans have offered prescription drug benefits as
an inducement for seniors to join Medicare HMOs. But Marsha Gold of Mathematica
Policy Research, a public policy research firm in Washington, noted that as
premiums for Medicare HMO members nationally have increased since 1999,
prescription drug coverage has shrunk. Traditional Medicare doesn't
offer outpatient drug coverage. Congress, though, is debating a $400 billion
proposal to provide a drug benefit to seniors. The proposed benefit, as
envisioned, would be administered through private health plans and insurance
companies. But the Medicare HMO experience has caused some experts to
question that approach. Health plans' pullouts from the
Medicare business "raise questions about the private sector," Gold
said. "If the private sector doesn't find it attractive, they're not
going to do it or stay in it." For the drug program to work,
AAHP's Pisano said, "the private sector will need adequate
funding." Harman also said that 34 jobs
will be affected by the decision to leave the Medicare HMO business in
Atlanta. He said the
company hopes all employees affected would find new jobs within Blue Cross. Copyright ©
2002 Global Action on Aging
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