Insurance Leaders Predict 670,000 to Lose Medicare+Choice

Jan. 13, 2003 - The American Association of Health Plans, the trade group representing insurance companies that provide health insurance, issued a news release late last week estimating 670,000 seniors will lose their Medicare+Choice coverage by February of 2004, due to “program funding” cuts by the U.S. government. Their news release is below.

Policymakers Missing Full Extent of Medicare+Choice Crisis

670,000 More Seniors Could Be Forced Out
Of Their Medicare+Choice Plan by January 2004

(Washington, DC)-Policymakers are not seeing the full extent of the Medicare+Choice funding crisis or the opportunity for using the program as a launching pad for broader-based Medicare reform, the American Association of Health Plans says.

Underscoring the depths of the problem, the association highlighted survey results showing that an estimated 670,000 more seniors and disabled could be forced out of their Medicare+Choice plan by January 2004, unless Congress acts soon to restore program funding.

Joined by seniors from around the nation, AAHP President and CEO Karen Ignagni said the continued Medicare+Choice funding crisis puts Congress “at risk of reneging on its promise to give seniors greater choices and lower out-of-pocket costs in Medicare.” Seniors from Texas, Florida, and Louisiana attending today's event represent the plight of millions of beneficiaries, all of whom have had to endure financial hardship, reduced benefits, and higher out-of-pocket costs because of congressional inaction on fixing the Medicare+Choice crisis, she said.

“A strong and stable Medicare+Choice program is a valuable safety net for millions of beneficiaries. Congress should not miss this opportunity to save the program and protect the more than five million seniors who depend upon it,” Ms. Ignagni added.

In September 2002, AAHP announced that more than 200,000 beneficiaries would be forced from their Medicare+Choice plan for 2003 because of insufficient government funding. Regrettably, this has proven only to be the tip of the iceberg. The survey results highlighted today find that more than 276,000 additional new beneficiaries are projected to leave the program this year because of the benefits and cost-sharing changes health plans have been forced to make for 2003, bringing to more than 476,000 beneficiaries who could be forced from Medicare+Choice in 2003 alone. Further, the survey finds that 394,000 additional beneficiaries are at risk of losing their Medicare+Choice plan in January 2004 if the 108th Congress fails to take action to stabilize the program. Taken together, between now and January 2004, more than 670,000 beneficiaries could be forced from their Medicare+Choice plans.

Experience shows that when funded adequately by the federal government, Medicare+Choice offers seniors and disabled beneficiaries better benefits with lower out-of-pocket costs. Indeed, as recently as 1997, Medicare+Choice was enrolling nearly 100,000 new beneficiaries per month, many of whom were eager to take advantage of prescription drug benefits, preventive care, and catastrophic protection not available then - nor now - under the Medicare fee-for-service program. Currently, five million beneficiaries are enrolled in Medicare+Choice, down markedly from a high of 6.3 million in 1999.

The American Association of Health Plans (AAHP) is the largest national trade organization representing more than 1,000 health maintenance organizations (HMOs), preferred provider organizations (PPOs), and other similar health plans that provide health care coverage to more than 170 million Americans.