Close Close

Life Health > Health Insurance > Medicare Planning

Aetna, PacifiCare Announce Medicare HMO Cuts

Your article was successfully shared with the contacts you provided.

NU Online News Service, Sept. 21, 4:48 p.m. – Aetna Inc., Hartford, and PacifiCare Health Systems Inc., Santa Ana, Calif., have announced widely anticipated cutbacks in their Medicare+Choice health maintenance organization programs for 2002.

Aetna says it will eliminate Medicare HMOs that now serve 277,000 of its Medicare HMO members, but that it will continue to operate Medicare HMOs in 26 counties in the Los Angeles area, the Philadelphia area, the New York area, and some of New York?fs New Jersey suburbs. Those Medicare HMOs serve a total of 172,000 members.

Aetna will be withdrawing from all of Arizona, San Diego, central New Jersey, the south New Jersey shore, western Pennsylvania and some suburbs of Philadelphia.

Aetna is reducing Medicare HMO service because of persistent Medicare medical cost inflation; a 2% cap on increases in federal Medicare reimbursement; and limits on the supplemental premiums Aetna can pass on to members who would like to keep their coverage, the company says.

PacifiCare is citing the same reasons for dropping Medicare HMO programs in 44 counties in Arizona, California, Oklahoma, Oregon, Texas and Washington. The PacifiCare cutbacks will affect 64,222 Medicare HMO members.

PacifiCare will continue to operate Medicare HMO programs with 1 million members, but it will be reducing benefits and increasing the supplemental premiums for those members, the company says.

“The disparity between what Medicare really costs and what it is willing to pay is widening to unsustainable levels,” Howard Phanstiel, president of PacifiCare, says. “As a result, we have few alternatives left other than to leave long-standing members, raise prices and in many cases significantly reduce member benefits?c. Simply put, the choice in the Medicare-plus-Choice program is disappearing.”