WEISS RATINGSMedicare HMO Fiasco: Few Options Available for the Nearly
One Million Seniors to be Dropped From HMOs by Year-End
|Only 22 Remaining Medicare HMOs Are Financially Strong|
PALM BEACH GARDENS, Fla., November 8, 2000 — By year-end 2000, nearly 934,000 seniors on Medicare will be dropped from their HMOs, on top of the 700,000 that were dropped in 1998 and 1999. But unlike the experience of previous years, when most seniors could still find alternative HMOs that might accept them, next year they will have few remaining options, according to a study by Weiss Ratings, Inc.
Among the 237 HMOs reviewed by Weiss that opened their doors to Medicare beneficiaries in recent years, 147 will have fully or partially abandoned the business by December 31. This leaves only 90 HMOs (17% of the HMOs rated by Weiss) that are continuing to maintain their current Medicare business, for now.
Among these remaining 90 HMOs, 37 are losing money. They lost a total of $645 million in 1999, plus another $82 million in the first quarter of 2000. At the same time, 34 have earned a Weiss Safety Rating of D+ ("weak") or lower. Only 22 have earned a Weiss rating of B- ("good") or better.
"Seniors who have been dropped from their HMO should not rejoin another," commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings, Inc. "The latest Medicare withdrawals greatly narrow the viable choices available to seniors down to just a handful of profitable and financially healthy Medicare HMOs, and even many of these may soon be dropping out of the business."
In 1998 and 1999, Weiss Ratings also advised consumers to avoid re-joining HMOs if possible because of continuing losses that were expected to cause HMOs to drop many more Medicare patients in future years. But at that time, a Medicare HMO was considered to at least be a viable choice for those who could not afford more expensive alternatives; today, it is not.
Dr. Weiss warns that most seniors will be forced into one of three difficult situations: (1) sub-standard health care under some form of welfare; (2) burdensome spending out-of-pocket for bills that Medicare fails to cover; or (3) Medicare supplement insurance (Medigap) which can often be overpriced.
"However, with some effort and the proper information, seniors can still hope to find reasonably priced health coverage," Dr. Weiss added.
Whether they have been dropped from an HMO or not, Weiss Ratings recommends that seniors seriously consider returning to Medicare while buying a good Medigap policy. However, consumers should buy only those benefits they truly need and shop around carefully to avoid overpricing, which is still common in the industry.
Weiss Ratings, Inc., is the only provider of a complete shopper's guide to Medigap insurance for consumers. The guide, customized for each person, 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, the Weiss guide, entitled the "Health Insurance Guide For Seniors," 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 16,000 financial institutions, including life and health insurers, Blue Cross Blue Shield plans, property and casualty insurers, banks, and brokers. It 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 may purchase a rating or analysis directly from Weiss for as little as $15 by calling 1-800-289-9222.
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Note to editors: Weiss Ratings' new advice for seniors, along with a sample page from a typical Medigap custom report, is available. Reporters and editors may also request a customized Health Insurance Report for Seniors, based on sample data. Alternatively, they may request the same report based on real data for a family member or friend, age 64 or older.
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