Protecting Medicare Beneficiaries When Their Medicare+Choice Organization Withdraws

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Protecting Medicare Beneficiaries When Their Medicare+Choice Organization Withdraws

The Medicare+Choice program was created by Congress in the Balanced Budget Act (BBA) of 1997. The first Medicare+Choice plans began in January, 1999. Most HMO contracts with the federal Centers for Medicare & Medicaid Services (CMS) operate under the Medicare+Choice program. A Medicare+Choice plan typically provides health care coverage that exceeds the coverage of Original fee-for-service Medicare. Currently, of nearly 40 million Americans in Medicare, about 5.6 million (15 percent of all beneficiaries) have chosen to be in a Medicare+Choice plan.

Over the past three years some beneficiaries who enrolled in a Medicare+Choice plan were affected by their plan's withdrawal:

	In 1999, 407,000 enrollees (about 6.5 percent of 1998 Medicare+Choice enrollees) were affected. About 51,000 of these people (less than one percent of enrollees) were left without any other Medicare+Choice option.
	In 2000, 327,000 enrollees (5 percent of Medicare+Choice enrollees) were affected by plans' withdrawals and 79,000 people (1.3 percent of enrollees) were left with no other plan option.
	In 2001, 118 Medicare+Choice contracts either withdrew from the Medicare+Choice program (65 contracts) or reduced a service area (53 contracts) affecting about 934,000 people (15 percent of total enrollment in Medicare+Choice). Of these, 159,000 people were left with no other Medicare+Choice option. The withdrawals of two plans, Cigna and Aetna, affected nearly half of these beneficiaries.
	In 2002, 58 Medicare+Choice contracts are either withdrawing (22 contracts) or reducing their service areas (36 contracts) affecting about 536,000 beneficiaries (10 percent of enrollees in Medicare+Choice). Of these, 50,000 people will have access to a private fee- for-service plan. But 38,000 will have no other Medicare+Choice option.
	As of September, 2001, there are179 Medicare+Choice managed care organizations which offer Medicare+Choice plans to people with Medicare. About 63.5 percent of seniors and disabled people covered by Medicare live in counties served by at least one Medicare+Choice plan.

As private sector managed care companies make business decisions that affect Medicare beneficiaries, CMS undertakes a comprehensive outreach effort to educate beneficiaries about their remaining health care options. These options can include other Medicare+Choice plans where available, or original fee-for-service Medicare with or without a Medigap policy.

Working With Medicare+Choice Organizations

A goal of the Bush Administration, the Department of Health and Human Services, and CMS is to reverse the decline in Medicare+Choice HMO participation and stabilize the program. To this end, HHS secretary Tommy Thompson announced improvements designed to reduce administrative burdens on health plans, make it easier for employers to contract with Medicare+Choice plans for their retirees' health care, and encourage plans to develop innovative products. CMS will reduce administrative burdens on Medicare+Choice plans by:

	Consolidating Private Plan Functions. The new Center for Beneficiary Choices is comprised of functions that, before the agency's recent re-organization, resided within three different components. The re-organization enables CMS to more efficiently respond to constituents' concerns.
	Extending The Acr Due Date. By giving plans until September 17 to file their annual Adjusted Community Rate (ACR) proposals (which contain their benefit packages and premium structures) plans can better evaluate their participation in the Medicare+Choice program, and their products for beneficiaries. Many plans had indicated that they would drop out if forced to make a decision based on July 1 information.
	Re-Evaluation Of The Risk Adjustment System. The Secretary and the Administrator suspended encounter data collection. They are exploring a system that will encourage innovation with less administrative burden.
	Streamlined Marketing Review. Consistent with the Benefits Improvement and Protection Act of 2000, CMS streamlined the review of most health plan marketing materials so beneficiaries receive information faster.
	Consistent Quality Improvement Requirements. Quality requirements for Medicare+Choice plans reflect the best practices requirements of the private sector. CMS recently allowed quality improvement projects created for private plans and Medicaid to be used for Medicare.
	Emphasis On Better Results For Beneficiaries. CMS will replace calendar-driven audits with results-based performance audits so that we target audits at "bad actors." "Good actors" can spend less time with paper and more time with patients.
	Quarterly Policy Changes. CMS is coordinating policy changes to coincide with contracting cycles and working to provide quarterly updates in a manual.
	Fall Advertising Campaign. CMS is vastly expanding its fall advertising campaign to educate beneficiaries about the full range of options open to them. And CMS is enhancing its toll-free telephone help line, 1-800-MEDICARE (1-800-633-4227 or TTY/TDD 1-877-486-2048) with 24-hour service, seven days a week. Fully 1000 additional customer service representatives have just been added to current personnel. They can tailor answers to individualized beneficiary questions and mail a hard copy of customized information immediately after each call.

Better Employer-Based Medicare Options For Beneficiaries

CMS recently announced that Medicare+Choice organizations have a new flexibility to work with employer-sponsored health plans so workers can seamlessly merge their pre-retirement benefits into Medicare coverage. This flexibility will give beneficiaries the kind of private plan choices available to many working Americans. Medicare+Choice organizations can tailor plans to the specific needs of employer group members while supplying all Medicare-covered health services. Now, it's easier for Medicare+Choice organizations to contract with employers. CMS intends to further re-invigorate the Medicare+Choice program by encouraging health plans to modernize their designs from "closed panel" HMOs to preferred provider organization and point-of-service models that have proved popular in the private sector.

CMS Heads A Comprehensive Effort To Provide Beneficiaries Affected By Non-Renewals With Accurate Information About Their Remaining Options

The goal of CMS is to work with its partners to provide Medicare beneficiaries affected by non-renewals with accurate information as soon as possible. CMS works to inform beneficiaries through its toll-free telephone help line, its web site, and its regional and national offices, and through the HMO plans that are withdrawing. (More about this later).

In addition, CMS' National Medicare Education Program works with public and private organizations to provide information to millions of older and disabled Americans.

CMS also provides information to public officials including members of federal, state, and local government agencies, members of Congress, State Health Insurance Assistance Programs (SHIP) and to some 12,000 trained counselors in 1000 local organizations administered by the states' insurance departments or departments of aging, and other programs. In past years over a third of the 1.3 million face-to-face counseling sessions and the 30,000 education events held by these insurance counselors have revolved around the Medicare+Choice program and Medigap insurance.

CMS also works with the news media to provide information to beneficiaries affected by non-renewals. A key piece of the CMS message is that beneficiaries are automatically eligible to return to original fee-for-service Medicare (which we call the Original Medicare Plan). In addition they have a special temporary right to buy certain Medigap policies on a guaranteed issue basis. A Medigap plan can help pay for some costs not covered by Original Medicare.

More general information is contained in the Medicare & You 2002 handbook which was mailed to 34 million homes of beneficiaries during the month of September. (Some of our 40 million beneficiaries share an address, hence the mailing of 34 million copies). Plan specific information will be mailed to beneficiaries with Medicare+Choice options on October 15, 2001. Information about how to select and buy a Medigap policy is available in our free publication, the 2001 "Guide To Health Insurance for People with Medicare: Choosing a Medigap Policy." (This can be downloaded at, http://www.medicare.gov, or ordered by calling the toll-free telephone help line, 1-800-MEDICARE (1-800-633-4227).

This October CMS will launch a $30 million advertising campaign, with a special outreach to ethnic minorities, to acquaint Medicare beneficiaries and their caregivers with the easy access to information available on our toll-free telephone help-line, 1-800-MEDICARE (1-800-633-4227), which is staffed 24 hours a day, seven days a week. After the phone call, hard copy information can be mailed directly to the beneficiary. Helpful publications can be ordered over the phone or read and downloaded, along with much of the information that can be conveyed by our telephone representatives, from our web site, www.medicare.gov.

Partners in our efforts to disseminate information to our beneficiaries include: the Leadership Council of Aging Organizations, the American Association of Health Plans, AARP, the National Council of senior Citizens, the National Rural Health Association, the National Council on Aging, the National Hispanic Council on Aging, the National Caucus and Center on Black Aged, the Older Women's League, the Social Security Administration, the U.S. Administration on Aging, State Health Insurance Assistance Programs, and our CMS regional offices.

Medicare+Choice Plans' Obligations To Beneficiaries After Non-Renewal

Even after Medicare+Choice Plans notify CMS of their intention to withdraw for the coming year, certain obligations to enrollees remain. Chief among them is the plan's obligation to provide contracted services through December 31, 2001, when most annual plan contracts expire. Non-renewing plans, or those reducing a service area, are required to send affected enrollees an information package by October 2, 2001. This package explains remaining options for health care coverage, including another Medicare+Choice plan, if available, or Original Medicare, and a Medigap policy. The package also explains beneficiaries' rights and protections if they choose to buy a Medigap policy.

CMS reviews and approves the information packages that are sent by plans to affected Medicare beneficiaries. Basically, the letter says that beneficiaries can remain in their plan through December 31, 2001, or they can disenroll before that time and either return to Original Medicare or enroll in another Medicare+Choice plan if available. If they take no action they will automatically be disenrolled from their plan after December 31, 2001 and return to Original Medicare. For help in selecting their best option, beneficiaries are invited to call 1-800-MEDICARE, or their local SHIP.

CMS Encourages HMO Plans To Enter New Markets

CMS will expedite review of potential Medicare+Choice organizations that would serve markets left without a Medicare+Choice option or other alternatives to Original Medicare.

Beneficiaries May Have Other Medicare+Choice Options

Other Medicare managed care plans and private fee-for-service plans that operate in the same area as a non-renewing plan are required to be open to accept new enrollments during a Special Election Period from October 1 through December 31, unless they have a CMS-approved capacity limit that has been met. If another plan in a county accepts new members, beneficiaries can select an effective start date of November 1, December 1, or January 1 as long as the new plan receives the completed election form prior to the start date. Beneficiaries who enroll in another Medicare managed care plan or a private fee-for-service plan do not need to submit a disenrollment form to the non-renewing plan.

Returning To Original Medicare

Beneficiaries who wish to return to Original Medicare may consider supplemental insurance coverage (a Medigap plan) before they disenroll from a Medicare+Choice plan. A beneficiary can stay enrolled in the Medicare+Choice plan until December 31, 2001, or disenroll and return to Original Medicare before December 31. But if a beneficiary is in a managed care trial period, he/she will need to voluntarily disenroll from the Medicare+Choice plan before the end of the trial period to take advantage of special temporary protections to buy Medigap insurance. It is best for each beneficiary to get complete information about his or her specific situation before disenrolling in order to preserve the right to buy certain Medigap insurance plans.

People who wish to leave their Medicare+Choice plan before January 1, 2002 can complete a disenrollment form that is available from their plans, any Social Security Administration office, Railroad Retirement Board office (for railroad retirees), or by calling 1-800-MEDICARE (1-800-633-4227).

Beneficiaries who don't file a disenrollment form will automatically be enrolled in Original Medicare starting January 1, 2002.

Supplemental Insurance Through Medigap

Beneficiaries whose plans leave Medicare have a special temporary right to buy Medigap policies designated as Plans A, B, C, or F. Some beneficiaries may have more choices of Medigap plans depending on the length of time they've been in a Medicare managed care plan, or their state's laws.

Beneficiaries can exercise this special temporary right by applying for a Medigap policy during a particular time frame. It begins on October 2, 2001, the date of the final notice of termination that the beneficiary receives from his/her Medicare+Choice plan) and ends 63 days after coverage stops (December 31, 2001) under their plan (which takes us to March 4, 2002). During this time period an insurance company that sells Medigap insurance CANNOT: refuse to sell the policy to the beneficiary, impose a waiting period, exclude coverage for a pre-existing condition, charge a higher price for the policy because of a beneficiary's health status.

CAUTION: Beneficiaries should make a copy of their Medicare+Choice plan's final notice of termination (the October 2 letter) to send with their application for Medigap insurance to prove loss of coverage under a Medicare+Choice plan and to show they have the special temporary right to buy a Medigap policy. Beneficiaries should also keep a copy of their Medigap application as proof that they applied for Medigap insurance within the required time period.

Supplemental Coverage For Retirees Enrolled In An Employer-Sponsored Plan

A beneficiary whose former employer has an arrangement with the managed care organization offering the Medicare+Choice plan in which he or she is enrolled is advised to consult with the employer before making plan changes.

Affected Beneficiaries May Be Able To Retain Their Doctors

Beneficiaries who choose to return to Original Medicare will probably be able to continue with many of the physicians they saw in their Medicare+Choice plan. More than 90 percent of Medicare+Choice physicians participate in Original Medicare, as well as in multiple Medicare+Choice plans. To see if a physician participates in Original Medicare click onto our web site: www.medicare.gov.

Information On Other Medicare+Choice Plans And Health Care Options

Current information about other Medicare+Choice plans available in a county is available at 1-800-MEDICARE (1-800-633-4227 and TTY 1-877-486-2048), and on the web site: www.medicare.gov Once on site, click on "Medicare Health Plan Compare," then key in your state, and zip code. (Some Medicare+Choice plans are available only in certain zip codes.) Many libraries and senior centers can also help with web site access and information. Information about Medicare+Choice plans available in 2002 will be on line October 2, 2001. The new "Medicare Personal Plan Finder" tool will enable beneficiaries to compare the aggregate out of pocket costs of available Medicare+Choice options and Medigap policies. For general help understanding health care options, beneficiaries may contact their State Health Insurance Assistance Program for help with understanding their health insurance options. They may also contact the U.S. Administration on Aging's toll-free Elder Care Locator at 1-800-677-1116 to be referred to their local area agency on aging.