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Medicare rolling out more choices in area

Bucking the trend of companies ending their Medicare HMOs, some are testing new options, including PPOs.

By KRIS HUNDLEY, Times Staff Writer
© St. Petersburg Times
published October 30, 2002

As Medicare HMOs leave the market or pare their benefits, the federal government is introducing some new health insurance options for seniors in 2003.

On Tuesday, the Centers for Medicare and Medicaid released details of three new demonstration projects available in the Tampa Bay area beginning in January, as well as information about Medicare HMO choices for the coming year.

The enrollment period for all alternatives to conventional Medicare will be from Nov. 15 through Dec. 31 for coverage beginning in January.

For the first time, Humana and United HealthCare will offer Medicare PPOs (preferred provider organizations) similar to commercial insurance in which members pay a higher premium but have a wider choice of providers.

And Well Care of Tampa will offer a hybrid HMO in which the insurer will actually pay part of a member's Medicare Part B premium. Members will receive about a $25 rebate on the $58.70 deducted each month from Social Security checks of Medicare HMO and traditional Medicare members. Medicare Part B helps cover doctors' services and outpatient hospital care.

Well Care's product, called Well Care Advantage Plan, will be available only in Hillsborough County and will be limited to 1,000 members.

The plan is open to all Medicare beneficiaries but is intended to attract seniors who have few health care expenses: It has no prescription drug coverage and the highest daily hospital "copay" of all plans, $375 per day for the first 10 days. The member's out-of-pocket expense is capped at $5,000, so catastrophic expenses beyond that will be covered.

"This is a test project for us, and it's for people who may not need a lot of care," said Stephen Dunn, vice president of sales and marketing for Well Care Choice.

With the addition of these alternatives, area seniors will have access to a much wider selection of insurance options. The one exception is Citrus County, where only traditional Medicare is available, as has been the case for several years.

Humana, which will offer its PPO only in Pinellas County, also will continue its HMO in Pinellas, Pasco and Hillsborough counties.

Well Care's HMO will be available in Hernando, Hillsborough, Pasco and Pinellas counties. United HealthCare's PPO will be available in all four counties, as will its HMO.

While none of the Medicare HMOs offered locally will charge a premium next year, benefits have been pared slightly, and patient copays generally have gone up.

For instance, Humana has doubled its copay for an ambulatory surgery center visit to $100. Well Care has bumped up its copay for generic drugs to $15 from $10 and added a prescription coverage limit of $100 per month. United HealthCare continues to offer no drug coverage under its HMO in Pinellas and Hillsborough counties.

The sudden flurry of experimental insurance products follows years of frustration with existing Medicare HMOs.

Insurers complain that the government's 2 percent cap on annual reimbursement increases falls woefully short of skyrocketing costs for items such as outpatient surgery and prescription drugs. Members complain that benefits have been whittled away so dramatically that it's hardly worth playing the HMO game of gatekeepers and referrals.

The upshot is that for the past five years, insurers have been reducing their service areas or leaving the market entirely. In September, Blue Cross Blue Shield of Florida said it is closing its Medicare HMO in Pinellas County at yearend, leaving about 6,000 members searching for an alternative. Nationwide, 33 Medicare HMOs are closing, affecting more than 200,000 beneficiaries.

Seniors, frustrated by being left in the lurch when HMOs close, have been returning to traditional Medicare. As of June 30, about 117,000 people in the Tampa Bay area, or 24.5 percent of the Medicare population, were in Medicare HMOs. That is down from a year earlier, when more than 147,000 people, or nearly 31 percent of the area's Medicare beneficiaries, were HMO members.

Dr. Scott Latimer, president and chief operating officer for Humana in Central Florida, said he hopes the company's new PPO option in Pinellas County will appeal to seniors who have been unhappy with HMOs or never strayed from traditional Medicare.

"PPO members can go to doctors in network and out of network and there are no referrals necessary," he said. "It wasn't designed to be so dramatic and earth-shattering that everybody in Pinellas County would want to sign up for it tomorrow. It was just intended to increase the number of choices an individual has."

The government has encouraged the development of such demonstration projects by promising to protect the PPOs against financial losses greater than 2 percent. It has also offered insurers the chance to be reimbursed at a higher rate for PPO services than under HMOs.

"This demonstration is officially designed to last three years, and that's part of the reason the government is doing some risk-sharing," Latimer said. "Our hope is that it will be successful, but there are no guarantees."


-- Kris Hundley can be reached at or (727)892-2996.

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