The number of HMOs providing supplemental Medicare coverage in Gila County dropped to zero Wednesday when PacifiCare of Arizona, the state's largest provider of Medicare HMO coverage, announced that it is terminating some of its senior plans in Gila and South Pinal counties.
The decision follows hard on the heals of a similar announcement last week by Intergroup of Arizona, which gave the HMO's seniors in Gila, Cochise and South Pinal counties until the end of the year to make other arrangements to supplement their Medicare insurance.
PacifiCare blamed its decision on skyrocketing drug costs and cutbacks in federal Medicare payments, which HMO officials across the country say are resulting in huge financial losses.
Intergroup of Arizona cited similar problems last week when it announced the end of its local Medicare+Choice plan, which provides prescription drug coverage and other health benefits to seniors.
Both HMOs said they will discontinue supplemental Medicare coverage Jan. 1, 2001.
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 about 4,800 in South Pinal County.
Individual and employer-group members of PacifiCare's HMO and seniors in the city of Apache Junction, will not be affected. Nor will Intergroup's 52,000 senior members in Maricopa, Pima and Santa Cruz counties.
"The most important thing PacifiCare's Medicare enrollees in Gila County need to know is that their coverage will remain in force and in full through the end of the year 2000," PacifiCare Public Affairs Director Jeff Jaroch said. "Nothing needs to be done through Dec. 31.
"Unless there is another Medicare HMO to roll in, they will be automatically disenrolled as of Jan. 1, 2001, and they will return to traditional Medicare, or fee-for-service."
Jaroch said those same patients should investigate the purchase of a MediGap insurance supplement, which costs more from $100 to $150 per month but provides some of the prescription drug coverage and other benefits they're receiving through their HMOs.
In July, affected PacifiCare customers will receive a detailed letter outlining their options, the deadlines, and who to contact for more information. A second letter in September will repeat that information.
"Unfortunately, federal reimbursement of Medicare is a national problem," Jaroch said. "It looks like things are under way to correct that, but certainly not in time for this year."
Beneficiaries of Intergroup's Medicare+Choice, Senior/CoCare plan will not lose health insurance coverage, but they must find another HMO, switch to Intergroup's original Medicare plan before the end of 2000, purchase a Medigap insurance supplement or submit medical bills directly to Medicare, losing the extra benefits many HMOs offer.
Switching HMOs may mean having to switch doctors, and reverting to Intergroup's original Medicare plan will result in the loss of some benefits.
For more information, call PacifiCare at (800) 347-8600, or Intergroup at (800) 977-7522.