News and Commentary

Though M+C Erosion Slows, Reimbursement Still an Issue

The exodus of health plans from Medicare+Choice will moderate somewhat next year, offering hope that the struggling system can make a comeback. About 200,000 beneficiaries now enrolled in Medicare HMOs will will have to find new coverage because of health plan withdrawals, according to the Centers for Medicare and Medicaid Services.

The agency says that nine health plans will exit the program, while another 24 will reduce service areas. That's at least an improvement over last year, when 58 plans serving 536,000 elderly dropped out of the Medicare program.

"We are disappointed to hear about any beneficiaries losing a health plan option, but the results are far better than expected," says CMS Administrator Thomas Scully.

Health plans are leaving the program because of low reimbursement rates, and Scully wants Congress to approve legislation that would increase funds for M+C.

Without such funding, "even more seniors and disabled Americans will continue to lose their existing prescription drugs and other medical services," says Scully.

The program will lose fewer enrollees this year than in recent years (407,000 lost coverage in 1999, 327,000 in 2000, and 536,000 this year).

Beneficiaries affected by the changes were expected to receive a letter on Oct. 2. that detailed coverage options.

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