The following is designed to assist you in answering the most commonly asked questions arising from managed care plan terminations and service area reductions.
GENERAL QUESTIONS
HMOs are leaving Medicare. How do I get information about whether this is true?
Individuals affected by a termination should have received notification from the HMO no later than November 2, 1998. Information regarding terminations is also posted on Medicare's website.
Are all HMOs terminating?
No. The changes that have been announced for January 1999 only affect certain Medicare HMOs.
Why are HMOs terminating their contracts with Medicare?
HMOs are independent businesses that make business decisions to either participate or not participate in a contract with Medicare. HMOs voluntarily choose to enter into contracts with the Health Care Financing Administration (HCFA) to serve Medicare enrollees. Each year HMOs have to make a choice to continue their contracts or adjust premiums and/or benefits. Some HMOs have made business decisions to terminate their Medicare contracts in certain areas. In some cases, the termination of the contract was the result of the merger between the two plans where only one corporate entity will continue in the Medicare program.
Can HCFA force Medicare HMOs to continue their contracts to provide services to Medicare beneficiaries?
No. While HCFA is responsible for ensuring that contracting HMOs meet their contractual obligations, we do not influence their core business decisions, nor can we force them to stay in the Medicare program.
What happens if your HMO terminates coverage in your area because it does not continue in the Medicare program?
If your HMO will no longer continue its contract with the Medicare program to provide health care to Medicare beneficiaries, the following alternatives are available to you:
- You may remain enrolled in the non-renewing HMO until the end of the contract period (i.e., December 31, 1998). If you choose this option, you need take no further action; you will automatically be disenrolled from the HMO and returned to the original Medicare plan as of the effective date of the HMO's termination. Until your disenrollment from the non-renewing HMO is effective, you must continue to use the HMO network of providers.
- You may join another managed care plan in your area that contracts with the Medicare program. For about 90% of the beneficiaries whose HMOs are nonrenewing, there are other plans available. If you choose this alternative before the end date of your coverage, you will automatically be disenrolled from the non-renewing HMO when you enroll in the new health plan. Health plan(s) in your area that have contracts with Medicare will be identified for you. They are required to accept your enrollment. Contact these plans concerning benefits and premiums in order to make the best selection for your personal needs. The only exception is for a small number of beneficiaries with end stage renal disease (ESRD) who are enrolled in a terminating HMO. These beneficiaries are precluded by law from enrolling in a plan offered by another managed care organization. These beneficiaries may enroll in other plans offered by the same organization.
- You may disenroll from the non-renewing HMO and return to the original Medicare plan before your coverage terminates. (Please read the information below before choosing this option.) If you choose this option, you may disenroll by notifying the non-renewing HMO. You may also disenroll by writing to or by visiting your local Social Security office or your local Railroad Retirement office if you are a railroad retiree. You will be disenrolled effective the first day of the month following the month in which you requested disenrollment. For example, if you request disenrollment on November 20th, you will be returned to the original Medicare plan effective December 1.
How soon will a decision need to be made for new health care coverage?
Members may remain enrolled in their HMOs until December 31, 1998, or they may disenroll from their HMOs and return to the original Medicare plan before December 31, 1998. (As noted below, this decision may affect which Medigap options are available.) It is recommended that members going to the original Medicare plan apply for a Medicare supplemental policy, also known as Medigap insurance, as soon as possible, in order to have Medigap coverage begin when the beneficiary returns to the original Medicare plan on January 1, 1999. However, as long as members apply within 63 days after HMO coverage terminates on December 31, 1998, their rights to get a new Medigap policy will be protected.
There is one additional consideration for a small number of beneficiaries. Members currently enrolled in an HMO who have Part B only and who wish to enroll in another Medicare managed care plan must do so no later than December 1 in order to ensure they can continue to be enrolled in a Medicare managed care plan option. The Balanced Budget Act created a new "Medicare+Choice" program, with new options for Medicare beneficiaries to choose HMOs and other health plans as a way to receive their Medicare benefits. However, beneficiaries with Part B-only coverage are not permitted to enroll in a Medicare+Choice health plan option.
MEDICARE SUPPLEMENTAL INSURANCE
A Medicare supplement policy, also known as Medigap insurance, is a private insurance policy designed to reimburse certain expenses that Medicare beneficiaries incur when services or items covered by the original Medicare plan, also known as fee-for-service Medicare, are not paid in full because of the application of Medicare deductibles or coinsurance. A Medigap policy may also pay for certain items or services not covered by Medicare at all, such as prescription drugs. Medigap only works with the original Medicare plan. It will not cover out-of-pocket expenses, such as copayments, in an HMO.
If I choose to return to the original Medicare plan, can I purchase a Medigap policy?
In most cases, yes. If you return to the original Medicare plan, you may wish to purchase a Medigap policy. A Medigap policy requires an additional monthly premium and will pay for some of your out-of-pocket costs which are not covered under the original Medicare plan. In addition to Medigap policies which insurance companies must offer you, which are discussed below, your non-renewing HMO has a legal obligation to arrange for you to be protected against any pre-existing condition exclusions under a Medigap policy for up to six months after the HMO terminates your coverage. The HMO may do this in a number of ways. The HMO must have notified you of arrangements it made for such coverage no later than November 2, 1998.
Some HMOs will identify a specific Medigap insurer, and the insurer will waive (i.e., not apply) the waiting period for coverage of pre-existing conditions. You may then purchase the new policy between specific dates identified by the non-renewing HMO. Your Medigap insurance will have an effective date that should coincide with the ending of the HMO's Medicare contract on December 31 so that you will have continuous coverage.
See below for specific information regarding beneficiaries under age 65.
Are there any protections for a person who chooses a Medigap policy other than the one chosen by the non-renewing HMO?
When the HMO terminates, participants have certain rights but must exercise them within 63 days after coverage terminates. If a person applies for a Medigap policy within 63 days, the seller or issuer of that policy may not:
- refuse to sell the person any Medigap policy designated "A", "B", "C" or "F" that the insurer sells in the State;
- discriminate in the pricing of such policy because of health status, claims experience, receipt of health care, or medical condition; or
- impose a pre-existing condition exclusion.
Further information is available from each State's insurance department or State Health Insurance Assistance Program.
What if I dropped a Medigap policy before I joined this HMO? Can I return to this Medigap policy? What happens if I do this before December 31, 1998?
If you were previously enrolled in a Medigap policy and this was the first managed care plan you enrolled in since starting Medicare, you have the right to return to the Medigap policy if:
- the Medigap policy dropped is still being sold by the same insurance company;
- you have not been enrolled in this HMO for more than 12 months;
- you disenroll from this HMO before December 31, 1998; and
- you reapply for that previous policy no later than 63 days after coverage from this plan terminates.
If the previous policy is no longer available, you are still guaranteed the right to buy a Medigap policy designated "A", "B", "C", or "F" that is offered by insurers in your State. This applies to beneficiaries who are under age 65 to the extent those policies are made available in the State. Before you disenroll, you should make sure the policy is still available from the original insurer.
Is there a limit on what Medigap insurers can charge?
The law requires that the premium charged must not be established in a way that discriminates based on health status. This means that insurers cannot consider your health status when determining eligibility or premium levels. Insurers must accept you at the same premium rate provided to otherwise similar applicants with no health problems. Insurers that adjust rates for non-health status factors, such as age or geographic location, can apply those adjustments if done on a nondiscriminatory basis.
May I shop around for a Medigap policy rather than accept the one chosen by the non-renewing HMO?
Yes. You are free to shop for a Medigap policy that meets your needs and provides coverage you desire at a price you wish to pay.
How do I go about finding a Medigap insurer?
Begin your inquiries as soon as you receive the non-renewing HMO's notice of termination. This way, you will have time to find the best coverage to meet your needs and have it go into effect on the day following the effective date of your non-renewing HMO's termination from the Medicare program.
Your best course of action in such situations is to contact your State Insurance Department or the State Health Insurance Assistance Program (SHIP). Your SHIP has been trained to assist you in resolving situations like these. The telephone number for the SHIP in your state is available in the Medicare & You handbook and bulletin or on the Internet at www.Medicare.gov. To find out about your SHIP, check the State Government listing in your telephone book, or contact your State's Office on Aging or Insurance Department.
Do these special protections apply to all Medicare beneficiaries, including those under age 65?
Medigap insurers must make any policies designated A, B, C, and F that they currently sell available to any beneficiaries over age 65 whose Medicare HMOs are terminated. Issuers who currently offer any of these four policies to beneficiaries under 65 who are entitled to Medicare because of disability or ESRD must also make those policies available to these beneficiaries whose HMOs terminate.
This provision does not require insurers to offer any policies (A, B, C, or F) that they do not currently sell, nor does it require issuers that do not currently sell policies to beneficiaries under age 65 to begin selling to those individuals. However, it does require the insurers to sell policies to individuals whose HMOs terminated without any underwriting or preexisting condition exclusions.
If Medigap policies are usually sold to beneficiaries under age 65 only on a restricted basis (that is, using medical underwriting), are Medigap insurers required to sell policies to beneficiaries under age 65 whose HMOs are not renewing?
Yes. For example, suppose a Medigap insurer in a particular state usually sells Medigap policies C and F to beneficiaries under age 65 -- but it only sells these policies to healthy beneficiaries who pass medical screening. According to the new rules, this insurer would have to sell these same policies C and F to a beneficiary whose HMO did not renew its contract without regard to health status and without exclusions for preexisting conditions.
In setting a price, this insurer would have to charge no more than it charges to others buying Medigap policies for the first time, and it could not discriminate in price on an individual basis.
Are Medigap policies sold to beneficiaries under 65 in most States?
At present, our research indicates that in all 30 States (and the District of Columbia) where beneficiaries are affected by HMO non-renewals, at least one insurer is currently selling Medigap policies to beneficiaries under age 65. Some States mandate that insurers selling policies to beneficiaries over 65 also sell to those under 65, while in other states at least some insurers do so on a voluntary basis. In either case, these insurers are required to sell these policies to beneficiaries whose HMOs did not renew contracts without regard to health status and without exclusions for preexisting conditions.
Although there is no guarantee that these Medigap insurers will continue selling policies in a particular market, at present nearly all beneficiaries should be able to find at least one Medigap policy available for purchase.
OTHER QUESTIONS
Will members be able to keep prescription drug coverage, or is new coverage being made available?
If a member currently has prescription drug coverage through a terminating HMO, this coverage will also end December 31, 1998. Members have the option to enroll in other HMOs available in their area which may cover prescription drugs. However, the Medigap policies that must be made available to members of terminating HMOs (policies "A", "B", "C" and "F") do not include prescription drug coverage. Similarly, the requirement that terminating HMOs make certain supplemental coverage available does not require them to make arrangements that include prescription drug coverage. Medicare supplemental policies that contain prescription drug coverage are available, but members must seek them out on their own. These insurers may refuse to sell a policy based on health status and may impose waiting periods for pre-existing conditions. Remember, if you had previous Medigap drug coverage (plans "H", "I", or "J"), and leave the HMO within 12 months, you can go back to this policy if the insurer still sells it.
Will I be able to go to the same doctors I've been using?
For those HMO members returning to the original Medicare plan it is very likely that you will be able to continue seeing the same doctors and other providers you had seen through the HMO. Most physicians also participate in the original Medicare plan. Beneficiaries need to check with their doctor and other providers to find out. If the providers participate in Medicare, there is no need for a change. If you choose to enroll in a new Medicare HMO, you may need to select a new primary care physician (PCP) and begin using a new network of providers. Before making a decision, you should check with each HMO.
How can I receive additional assistance or more information about my choices?
You can contact your State Health Insurance Assistance Program (SHIP). The following agencies can also give you information on Medicare supplemental insurance policies and help with other health care decisions.
- County Aging Services
- Senior Centers
- Area Agencies on Aging
- State Insurance Departments
- The U.S. Administration on Aging
- HCFA Regional Offices