WEISS RATINGS

Consumers Continue to Choose Medicare HMOs
Despite High Risk of Being Dropped
Ohio, Texas, and California Lead Nation in Number of Seniors Affected at Year-end

PALM BEACH GARDENS, Fla., December 9, 2002 - Although Medicare HMOs have dropped more than 2.4 million seniors since 1998, including the 215,000 enrollees who will lose coverage at the end of this year, consumers continue to choose to receive their Medicare benefits through managed care plans. Enrollment in the program has declined only 16.6 percent since the plan's inception, despite a 48.3 percent decline in the number of Medicare HMOs, from 346 companies in 1998 to 179 in 2003, as illustrated below:

Year

Total Number
of Enrollees

No. Cos. Offering
Medicare+Choice

Affected
Enrollment

2003

5,000,000

179

215,000

2002

5,000,000

155

536,000

2001

5,600,000

179

934,000

2000

6,500,000

267

327,000

1999

6,000,000

310

407,000

19981

6,000,000

346

n/a

Total

2,419,000

Source: Centers for Medicare & Medicaid Services; www.medicare.gov.

"The figures speak to the heart of the matter - seniors want and need access to affordable and more comprehensive health care," commented Melissa Gannon, vice president of Weiss Ratings, Inc. "In exchange for the lower out-of-pocket costs and additional benefits that HMOs provide, consumers will accept a lack of provider choice, consistent decreases in covered services, and the risk of losing coverage altogether."

The five states with the largest number of enrollees being dropped from coverage at year-end 2002 are:

State

Affected Enrollees

Ohio

26,984

Texas

26,780

Calif.

26,752

Fla.

25,597

Mo.

14,922

For Medicare beneficiaries losing their coverage by the end of the year, Weiss Ratings 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, 2003. The current HMO that is rescinding coverage is required to provide 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 if they have met their predetermined capacity levels.

Avoid HMOs if you can afford to. The federal government has become more aggressive this year in its effort to improve the Medicare+Choice program in order to make it more attractive to HMOs and to also include PPOs. Although the trend of companies pulling out of the program has stabilized, enrolling in yet another HMO will put you at risk of joining the thousands of additional Medicare beneficiaries who could lose their coverage in the future.

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 is far less likely you will be dropped again. You will also have more freedom to choose your provider or hospital and will benefit from better access to specialists.

Warning: You have only 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 wait 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 female in West Palm Beach, Florida could pay $2,028.25 for Plan A from Guarantee Trust Life Insurance Company, but only $1,135.50 if he signed up with State Farm Mutual Automobile Insurance Company. Likewise, he would pay $2,819.00 for Plan F with Continental General Insurance Company, but only $1,888.00 for Plan F with USAA Life Insurance Company.

Senior citizens shopping for the least expensive and safest Medigap policies can obtain a Shopper's Guide to Medicare Supplement Insurance ($45) available from Weiss Ratings at 1-800-289-9222 or by visiting www.WeissRatings.com. The report, based on each consumer's individual circumstances, provides customized comparisons of the actual premium rates offered in his or her county of residence for each of the ten Medigap plans, along with the Weiss Safety Rating for each carrier.

Weiss issues safety ratings on more than 15,000 financial institutions, including banks and thrifts, HMOs, life and health insurers, Blue Cross Blue Shield plans, property and casualty insurers, and securities brokers. Weiss also rates the risk-adjusted performance of more than 11,000 mutual funds and 9,000 stocks. 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.


1 The Medicare+Choice program became effective January 1, 1999. All Medicare HMOs that did not disenroll by the end of 1998 automatically rolled into the Medicare+Choice program on January 1, 1999.

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