CMS News

The Administration has taken aggressive steps in the past year to improve health plan options for seniors and disabled Americans.  The Medicare + Choice program has begun to stabilize, but we will still see some significant erosion of coverage next year.  For 2003, nine health plans announced their decision to leave the program and 23 health plans and one private fee for service plan will reduce their service areas.  We are disappointed to hear about any beneficiaries losing a health plan option, but the results are better than expected, and we have far fewer plans leaving Medicare than in 2001 or 2002.

Four percent (198,315 enrollees) of the Medicare beneficiaries currently enrolled in a Medicare + Choice plan in a total of 33 health plans will lose access to some health plan options.  Fortunately, 168,635 of these beneficiaries, whose current plan is leaving Medicare, will be able to choose from another Medicare coordinated care plan (162,144 enrollees) or a private fee for service plan (7,532).  Additionally, nearly 74,000 beneficiaries (73,696) will be eligible to enroll in one of the new preferred provider options (PPO) announced by Secretary Thompson in August.  In net, approximately 29,000 will lose a private plan option, requiring them to return to fee-for-service Medicare.

Medicare + Choice is especially important for lower-income seniors, minority seniors and disabled individuals, who depend the most on these plans to help them keep costs affordable for the valuable benefits that are not available in fee-for-service Medicare.  If Congress does not act to improve Medicare + Choice payment rates, even more seniors and disabled Americans will continue to lose their existing prescription drugs or other medical services.  Low-income beneficiaries can’t afford to buy Medigap plans – the Medicare + Choice plans provide prescription drugs and other essential benefits that are vital to their health.

A continued goal of the Bush Administration is to stabilize the Medicare + Choice participation and modernize Medicare by giving people who are covered by Medicare additional and better benefit options, as well as access to affordable prescription drugs.  In addition to his proposals to modernize Medicare, President Bush proposed a payment increase to health plans of up to 6.5 percent to stabilize Medicare + Choice.  There is bipartisan support for saving Medicare + Choice.  The House has taken a first step and now the Senate should act to preserve this critical health coverage option.

It is important for all health plan members who may be affected by a health plan’s decision to leave Medicare to remember that they need not take any action right now.  They will be receiving a letter by October 2 that explains their options.  These options can include joining other Medicare + Choice plans under an HMO, PPO or private fee for service plan or returning to original fee-for-service Medicare with or without a Medigap policy.

The nearly five million seniors and disabled Americans who are enrolled in Medicare + Choice plans know that their plans provide quality care and good value.  They badly need Congress to take action this year to protect and improve the program.  The Administration looks forward to working with Congress to preserve and improve Medicare + Choice before Congress adjourns this year.

Additional information about the 2003 Medicare + Choice non-renewals is available at:

http://cms.hhs.gov/healthplans/nonrenewal/reports2003.asp