WEISS RATINGS

Advice For 536,000 Medicare Beneficiaries
Being Dropped From Their HMOs On January 1
California, Florida, Pennsylvania and New Jersey Hit Hardest

PALM BEACH GARDENS, Fla., October 29, 2001 — By year-end 2001, more than 536,000 seniors on Medicare will be dropped from their HMOs, on top of the 1.6 million that have already been dropped since 1998. The affected enrollees, living in 28 states, will be forced to find alternative coverage before December 31, 2001.

"This is just the latest in a long series of blows to the elderly," commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings, Inc., the only provider of safety ratings on most HMOs and Blue Cross Blue Shield plans. "Insufficient federal funding and rising medical costs have pushed many HMOs to dump their elderly enrollees, boost out-of-pocket expenses for remaining members and reduce medical benefits overall."

Fifty-four HMOs are either withdrawing from Medicare completely or reducing their service areas, with eight individual HMOs dropping more than 20,000 enrollees each:

HMO1 Weiss
Safety
Ratings
2
Number of
Seniors
Dropped
3
State(s)
in Which
Coverage is
Affected
3

Aetna Life Insurance Company C+ 54,561 Pa.
Aetna U.S. Healthcare, Inc. B- 38,383 N.J.
Connecticare, Inc. B- 24,438 Conn.
Health Options, Inc. B 37,970 Fla.
Humana Health Plan, Inc. C+ 21,647 Ill., Ind., Ky.
Pacificare of California / Secure Horizons C- 35,797 Calif.
Pacificare of Texas, Inc. D+ 25,262 Texas
United Healthcare of Illinois, Inc. C 32,775 Ill.
  1. Contract name may be different than name legally reported on financial statement.
  2. A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak; F=Failed
  3. Data Source: Centers for Medicare and Medicaid Services, formerly HCFA (www.cms.hhs.gov/lplans/nonrenewal)

The 10 states with the largest number of seniors being dropped from their Medicare HMOs are:

State Affected
Enrollees
3

Calif. 83,634
Fla. 59,348
Pa. 54,561
N.J. 53,144
Texas 45,977
Ill. 40,539
Conn. 38,785
Mich. 31,446
Ark. 16,841
N.Y. 15,590

For Medicare beneficiaries who will be losing their coverage by the end of the year, Dr. Weiss offers the following advice:

Start checking into alternative coverage immediately. To avoid any coverage gaps, enroll between now and December 31 in a new policy that will take effect no later than January 1, 2002. Your current HMO that is dropping you is required to provide you a list of HMOs in your area that are still providing Medicare coverage. Contact the Medicare+Choice Help line at 1-800-MEDICARE if you did not receive this information. Be forewarned, however, that some HMOs are not accepting new Medicare patients, and even those that do accept you now may decide to drop you in the near future.

Avoid HMOs if you can. Unless the federal government makes drastic changes to the Medicare+Choice program making it more attractive to HMOs, the trend of companies pulling out of the program will continue. Thus, enrolling in yet another HMO will put you at risk of joining the hundreds of thousands additional Medicare beneficiaries who will likely lose their coverage in the next few years.

Seriously consider leaving HMOs entirely and shifting to traditional Medicare along with a supplemental insurance policy. You are guaranteed eligibility in Medicare supplement insurance ("Medigap") regardless of your health status. Under this guarantee, you can choose among four different Medigap plans -- called Plans A, B, C and F. Depending on your health, you may also be eligible for the six other Medigap plans available. With Medicare and Medigap, it's far less likely you will get dropped again. Plus, you will have more freedom to choose your provider or hospital and will benefit from better access to specialists.

Warning: You have 63 days from the date you leave your current HMO to take advantage of this guarantee, with the last possible day being March 4, if you waited until December 31 to switch.

Shop around for the least expensive Medigap policy that meets your needs. The cost of Medigap insurance can vary drastically by insurance provider, even for identical plans offering the same benefits in the same location. For example, a 65-year-old male in Saginaw, Mich. could pay $1,278.86 for Plan A from Bankers Life and Casualty Company, but only $595.65 if he signed up with Standard Life and Accident Insurance Company. He would pay $2,149.80 for Plan C with Mutual of Omaha Insurance Company, but only $965 for the identical Medigap policy with Continental Life Insurance Company of Brentwood, Tenn. Likewise, he would pay $1,835.70 for Plan F with Guarantee Trust Life Insurance Company, but only $991 for Plan F with Standard Life and Accident Insurance Company.

Weiss Ratings, Inc. is the only provider of a complete shopper's guide to Medigap insurance for consumers. Customized for each person, the "Health Insurance Guide For Seniors" is based on the senior's age, gender and address, and provides a full listing of available data of all insurance providers, policies, and actual quotes for each of the ten Medigap plans, "A" through "J." In addition, it includes the latest Weiss Safety Rating for each insurer, along with a complete list of the benefits of each Medigap plan.

Weiss issues safety ratings on more than 15,000 financial institutions, including HMOs, life and health insurers, Blue Cross Blue Shield plans, property and casualty insurers, banks, and brokers. Weiss also rates the risk-adjusted performance of more than 11,000 mutual funds. Weiss Ratings is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries.

Consumers needing more information on the financial safety of a specific company can purchase a rating and summary analysis for as little as $7.95 through the Weiss Ratings web site at www.WeissRatings.com, or starting at $15 by calling (800) 289-9222.

Available from Weiss Ratings is a customized "Health Insurance Report for Seniors.

Weiss Ratings, Inc.

Companies Withdrawing Fully or Partially
From Medicare+Choice

HMO1 Weiss
Safety
Ratings
2
Number of
Seniors
Dropped
3
State(s)
in Which
Coverage is
Affected
3

Aetna Life Insurance Company C+ 54,561 Pa.
Aetna U.S. Healthcare, Inc. B- 38,383 N.J.
Health Options, Inc B 37,970 Fla.
Pacificare of California / Secure Horizons C- 35,797 Calif.
United Healthcare of Illinois, Inc. C 32,775 Ill.
Pacificare of Texas, Inc. D+ 25,262 Texas
Connecticare, Inc. B- 24,438 Conn.
Humana Health Plan, Inc. C+ 21,647 Ill., Ind., Ky.
Health Net of Ca B 19,870 Calif.
Texas Health Choice, L.C. D+ 19,236 Texas
Blue Care Network — Southeast Michigan C 16,940 Mich.
United Healthcare of Florida, Inc. C 14,364 Fla.
Medspan Health Options, Inc. D+ 14,347 Conn.
Oxford Health Plans (NY), Inc. C- 13,885 N.Y.
CA Physicians Serv/DBA Blue Shield of Calif. A- 11,787 Calif.
Amerihealth HMO, Inc. B 11,333 N.J.
Blue Cross & Blue Shield United of Wisconsin C- 10,366 Wis.
Premera Blue Cross C+ 9,967 Wash.
HMO Partners / Health Advantage C- 9,691 Ark.
HMO Colorado, Inc. C 9,250 Colo.
National Med, Inc. D+ 9,012 Calif.
MCare C- 8,279 Mich.
United Healthcare of Arkansas, Inc. B 7,150 Ark.
Blue Cross Blue Shield of Kansas City B- 6,917 Mo., Kan.
Aetna U.S. Healthcare, Inc. C 6,003 Ariz.
Family Health Plan, Inc. E 5,579 Ohio
Aetna U.S. Healthcare of California, Inc. C+ 4,931 Calif.
Pacificare of Arizona, Inc. C+ 4,906 Ariz.
Av-Med Health Plan, Inc. D 4,836 Fla.
Preferred Plus of Kansas, Inc. B- 4,813 Kan.
Selectcare HMO, Inc. U 4,635 Mich.
Renaissance HMO, Inc. E 4,159 Ohio
Oxford Health Plans (NJ), Inc. C- 2,926 N.J.
The Oath of Alabama, Inc. E+ 2,733 Ala.
Health Plan Hawaii C 2,666 Hawaii
Sterling Life Insurance Company C 2,521 Miss., Texas
Beacon Health Plans, Inc. E- 2,178 Fla.
United Healthcare of Ohio, Inc. C+ 2,176 Ohio
Advantage Health Plan, Inc. U 2,175 Ind.
Community Care HMO, Inc. E+ 1,714 Okla.
Blue Cross of California A- 1,676 Calif.
Health Alliance Plan of Michigan A 1,592 Mich.
Community Health of Ohio E+ 1,554 Ohio.
HIP of Greater New York D- 1,281 N.Y.
Pacificare of Washington, Inc. U 933 Wash.
Blue Cross Blue Shield of DE, Inc. B 815 Del.
Pacificare of Oklahoma, Inc. B- 804 Okla.
Inter Valley Health Plan, Inc. U 561 Calif.
Health Plan of the Upper Ohio Valley B- 543 W.Va., Ohio
Americhoice of New Jersey, Inc. C+ 502 N.J.
Pacificare of Oregon, Inc. B- 442 Ore.
Health Net of NY5 424 N.Y.
Kaiser Foundation HP of GA, Inc. C 348 Ga.
Fallon Community Health Plans, Inc. C 12 Mass.
Out of Area4 2,804
Total 536,469
  1. Contract name which may be different than name legally reported on financial statement.
  2. A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak; F=Failed
  3. Data Source: Centers for Medicare and Medicaid Services, formerly HCFA (www.cms.hhs.gov/lplans/nonrenewal)
  4. Residents outside of defined service areas and not included in state totals.
  5. Formerly known as Physicians Health Services of New York
Weiss Ratings, Inc.

Number of Seniors Being Dropped By State

State Affected Enrollees

Calif. 83,634
Fla. 59,348
Pa. 54,561
N.J. 53,144
Texas 45,977
Ill. 40,539
Conn. 38,785
Mich. 31,446
Ark. 16,841
N.Y. 15,590
Ohio 13,993
Ky. 12,041
Ariz. 10,909
Wash. 10,900
Wis. 10,366
Colo. 9,250
Kan. 6,765
Mo. 4,965
Ind. 4,017
Out of Area 2,804
Ala. 2,733
Hawaii 2,666
Okla. 2,518
Miss. 1,042
Del. 815
Ore. 442
Ga. 348
W.Va. 18
Mass. 12
Total 536,469

Data Source: Centers for Medicare and Medicaid Services, formerly HCFA
(www.cms.hhs.gov/lplans/nonrenewal)


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