Firm Revives Local Medicare-Plus Coverage

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A new insurer has received approval to sell traditional Medicare coverage to Gila County seniors at HMO premium rates.

Sterling Life Insurance Company, a subsidiary of Chicago-based Aon Corp., will provide an option for seniors who will be left without coverage on the first day of 2001, when the two HMOs currently providing Medicare coverage in Gila County discontinue that service.

Those HMOs Intergroup and PacifiCare also will slash senior coverage by the end of the year in Pinal, Cochise and Pima counties.

Sterling announced Monday that, beginning Sept. 1, it will offer seniors coverage for monthly premiums of $55 in 2000 and $65 in 2001. Patients can see the doctor of their choice with a referral from a primary care doctor.

The plan doesn't offer prescription benefits.

"It's a unique hybrid product for those who want the cost benefits of a managed-care plan but the freedom to choose and see their own doctors," said Debbie Ahl, chief operating officer of Olympic Health Management, a Bellingham, Wash.-based subsidiary of Aon Corp. that will administer and market the Sterling plan in Arizona.

According to Steven E. Lippai, president of Sterling Life Insurance Company, the new plan represents a break from the Medicare tradition in which recipients "had to choose between high-priced products that provide flexibility in terms of coverage and providers, or low price or zero-premium products that offer minimal flexibility."

Sterling Life Insurance Company is a subsidiary of Chicago-based Combined Insurance Company of America, a billion-dollar insurer that focuses a majority of its marketing efforts in rural America. About 15 percent of its insurance operations in the domestic market are focused on products sold to the elderly.

Sterling, Olympic and Combined are subsidiaries of Aon Corp., a diversified worldwide corporation with $21 billion in assets and 45,000 employees.

Sterling's offering comes at a fortuitous time for area seniors, who had their two HMO supplemental Medicare coverage options slashed to zero last month.

PacifiCare of Arizona, the state's largest provider of Medicare HMO coverage, announced that it was dropping some of its senior plans Jan. 1, 2001 in Gila and South Pinal counties, six days after Intergroup of Arizona revealed its plan to take the same action on the same date in Gila, Cochise and South Pinal counties.

The move gave seniors in those areas until Dec. 31 to make other arrangements to supplement their Medicare insurance.

The reasons cited by both providers were skyrocketing drug costs and cutbacks in federal Medicare payments, a complaint now echoing across the country from HMOs claiming huge financial losses.

Intergroup's cutback will affect 2,600 seniors in Gila County and 7,800 seniors throughout the three counties. PacifiCare's HMO has 195 senior members in Gila County and 4,800 in South Pinal County. Individual and employer-group members of PacifiCare's HMO will not be affected.

Beneficiaries of Intergroup's Medicare+Choice, Senior/CoCare plan will not lose health insurance coverage, but they have been advised to find another HMO, switch to Intergroup's original Medicare plan before the end of 2000, or submit medical bills directly to Medicare, which would result in the loss of extra benefits many HMOs offer.

Switching HMOs could mean having to switch doctors, and reverting to Intergroup's original Medicare plan would mean the loss of some benefits.

For more information on the Sterling Life Insurance Co. Medicare plan, call (888) 858-8572, or (888) 858-8567 for the hearing impaired.

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