Medicare Advantage Changes Strike Rural Oregon Hardest
Private Medicare plans are beginning a precipitous withdrawal from the state of Oregon
Additional changes over the next several years to Medicare Advantage plans aimed at reducing administrative overhead will hit Oregon especially hard. Roughly 200,000 Oregonians are currently enrolled in such private health plans out of more than 600,000 who are Medicare eligible.
“Eventually we may not be able to pay doctors enough to see the patients, and we’ll have to go away,” said Jeff Heatherington, president of FamilyCare, which administers an HMO Medicare Advantage plan with 3,000 enrollees.
Heatherington doesn’t think his plan is alone. A precipitous withdrawal could take place within four years, he said. “It’s a good possibility there won’t be any more Medicare Advantage plans in Oregon,” he said. “If they don’t do something about the physicians’ rates, in particular primary care, essentially access will go away.”
The Medicare Advantage plans leaving the market next year include national for-profit companies such as Cigna Corp., Humana Inc. and United Health Group. Seniors can begin enrolling in new plans from Nov. 15 to Dec. 31.
Health plans leaving the market now are reacting to changes made by Congress in 2008 that require fee-for-service plans to establish provider networks starting next year. The law came amid complaints, many of which from rural Oregon, that those plans were aggressively marketing and then sticking seniors with insurance policies few doctors would accept.
“It’s a good thing the plans have to prove they have doctors who will see Medicare patients,” Heatherington said.
In several rural parts of the state, it’s not such a good thing. While the federal government recently announced premiums for Medicare Advantage plans on average would go down 1 percent nationally, the lost competition in places like rural Oregon means some seniors might be spending far more.
ODS Health Plans will offer the only Medicare Advantage plan in several rural counties, said Lisa Emerson, manager of the state’s Senior Health Insurance Benefits Assistance program. People in those areas still have access to original Medicare administered by the federal government.
“Some fairly healthy people signed up for private fee-for-service (Medicare Advantage) plans with lower costs,” Emerson said. Now that those plans won't be offered next year, “we’re hearing from people who have a hardship financially. I wouldn’t say it’s an overwhelming response right now. We’re just starting to get the phone calls.”
Congress created Medicare Advantage plans in 1997 as a way to save money by putting the management of benefits in the hands of private health plans with an incentive to save money.
But the opposite turned out to be true. In 2008 and 2009, the Commonwealth Fund published several reports about purported over-payments to Medicare Advantage plans compared to traditional Medicare administered by the federal government.
Medicare paid, the reports found, $11 billion more to Medicare Advantage in 2009 than it would have cost the government for the same services under traditional Medicare. In Oregon, those overpayments appeared among the highest in the nation because the payments under traditional Medicare are among the lowest.
As part of the Patient Protection and Affordable Care Act, signed by President Obama earlier this year, the federal government set the stage for an estimated $136 billion in cuts to Medicare Advantage plans over the next 10 years.
Heatherington believes losing Medicare Advantage will be detrimental to Oregonians. Those plans, he says, provide better service and more reliable access compared to original Medicare.
“The bottom line is we’re not getting any increase for our rates in 2011,” Heatherington said. “They’re going to hold everything flat. At the same time, they’re going to allow hospitals a cost of living increase every year. Eventually the costs will hit the ceiling of the premium. We’ll either have to cut physician rates or just have to close down.”
To Learn More
Medicare open enrollment period is Nov. 15 through Dec. 31.
For more information visit Oregon SHIBA or call 1-800-722-4134.
Rural counties most impacted are Baker, Curry, Douglas, Harney, Klamath, Lake, Malheur, Sherman, Umatilla, Union, Wallowa and Wasco.
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Yes, well try living in Malheur County where the elderly had medicare advantage policies at no cost that permitted them to pay a minimal amount for generic drugs, say $6.00 per month for a blood pressure tablet. Look at 2011. At the present time, it will cost $64.10 per month premium for Medicare Advantage with no drug coverage or $127 per month with Part D coverage. For now, it's a take it or leave it proposition, although one source has published the idea that at least one other choice is coming down the pike.
Now take this same situation for a person who is living on Social Security only. The income is $11,778.00. Just $8.00 per year over the maximum income allowable for receiving assistance in paying Part B, medicare. Some adjustments may happen, since the numbers of people in Oregon who are going to endure this kind of hardship is considerable. But that's the story today. What do you have to say about this?
To tell around 20,000 elderly people, "Well that's the way the cookie crumbles. There are still 180,000 or so in Oregon who get pretty darned good benefits for a reasonable premium."
This is kind of like the Republican stand on unemployment. "So what if you haven't had, don't have, and can't get a job to support your family. We're out of money. And 90% of the population are getting along just fine."
Paul Marlow
Harper, Oregon
Please note that while private fee-for-service plans are exiting the market due to their inability to form a panel, that other community based Medicare Advantage Plans remain as options. For example, ATRIO Health Plans Inc. will continue to provide services in Klamath and Douglas Counties. ATRIO Health Plans has been in business since 2005 and is owned and operated by the local providers in those counties.
Physicians must close down because they are not paid enough...?
This article is hysterical and ignores the issue that the care is too expensive and the insurers are too greedy, the reimbursement rates are absorbed by the insurers, not the physicians.
It is an irresponsible and incomplete viewpoint.
It is attacking the cost control answer rather than putting us down the same ever expanding road that is bankrupting us at the behest of the enrichment of people that already provide a substandard system of care in relation to other industrialized nations.
R Drake Ewbank
Springfield OR