NU Online News Service, Sept. 21, 9:36 a.m. – Health Net Inc., Los Angeles, today announced that as of Jan. 1, its health plans will no longer offer Medicare+Choice products in nine counties in California and New York.

Health Net provides Medicare+Choice benefits to nearly 14,000 beneficiaries in these nine counties, representing approximately 6% of Health Net’s 224,000 total Medicare+Choice members, the company says.

Beginning Jan. 1, Health Net of California will stop offering Medicare+Choice individual and group products in El Dorado, Marin, San Joaquin, Stanislaus and Ventura counties, affecting approximately 8,900 beneficiaries, the company says.

In Riverside and San Bernardino counties, Health Net will stop offering an individual Medicare+Choice product, affecting approximately 2,600 individuals, but will continue to offer its group product through employer-sponsored plans, the company says.

In addition, Health Net of California will stop offering Medicare+Choice products in the northern and central portions of San Mateo County, affecting 2,000 beneficiaries; it will continue to offer the product in the southern portion of the county, the company says.

Health Net of the Northeast, formerly PHS Health Plans, will stop offering its individual and group Medicare+Choice products in New York City, affecting approximately 400 beneficiaries, the company says.

“Government reimbursement rates for Medicare+Choice are not keeping pace with rising health-care costs — forcing us to again make tough and difficult decisions about our product offerings,” says Jay Gellert, president and chief executive officer of Health Net Inc.

“We can participate in Medicare+Choice only in counties where reimbursement rates cover the costs of care and allow us to provide beneficiaries with a sufficient network of doctors and hospitals — and where these doctors and hospitals want to participate in the program.”

On average, Health Net’s health-care costs for seniors are increasing by more than 10% this year, while the increase in government reimbursements is less than 3.2% for 2002. As a result, Health Net today also announced that it will reduce pharmacy and other benefits and increase supplemental premiums and co-payments in 2002 in the counties where it continues to offer Medicare+Choice products, the company says.

Health Net Inc. submitted its plans on Sept. 17 to the Centers for Medicare and Medicaid Services. Health Net is contacting affected Medicare beneficiaries, physicians and employer groups, notifying them of service area changes and providing them with information on other Medicare options, the company says.

Once the company receives approval from CMS, Health Net will notify its Medicare+Choice enrollees of 2002 benefit and premium changes. Notification will occur on or before Oct. 15.

Health Net says it will work with affected beneficiaries, physicians and hospitals to ensure a smooth transition to another Medicare+Choice plan or back to traditional Medicare.

Health Net will continue to offer Medicare supplement products to eligible beneficiaries statewide in California.