An estimated 711,000 elderly and/or disabled Medicare recipients likely will have their coverage canceled as the nation's health maintenance organizations (HMOs) reduce their Medicare participation to save money.
This news adds to a growing trend as HMOs reduce or eliminate their coverage for a number of groups that may need it most. At least 730,000 HMO patients already have lost their coverage during the last two years, the New York Times reports.
This move also hits low-income elderly the hardest. Many of them joined HMOs to help pay for their prescription drugs, and now may have to pay all these costs on their own unless they can go back to Medicaid's existing "fee-for-service" program, join another HMO or unless Congress enacts substantial prescription drug benefits for next year, the Times reports.
The HMO industry moved to meet a July 3 deadline for participation in Medicare programs. While the cuts have been heavily criticized by some advocacy groups, the HMOs had to take action because they are "over-regulated and underpaid" by the federal government, said Karen M. Ignagni, president of the American Association of Health Plans trade group.
"This day did not have to happen, and each and every health plan has worked hard to avoid it. This news represents lost opportunities. For two years America’s health plans have asked Washington to honor the promise made to seniors and individuals with disabilities, and to adequately fund the Medicare+Choice program. Last year, Congress improved the formula for paying for health plan participation in Medicare, but did not solve the basic problem of insufficient financing," Ignagni stated in a prepared release.
The House of Representatives this past week approved a plan which would provide federal subsidies for HMOs to offer prescription cost reduction to elderly patients. Congressional Democrats have criticized the bill because they claim it gives the insurance companies too much leeway.
The bill is schedule to be reviewed by the Senate Finance Committee.
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