MINNETONKA, Minn. (AP) — Medica Health Plans’s decision to drop Medicare HMOs in four Minnesota counties gave rise to calls Wednesday for a federal lawsuit and a push in Congress to change the federal Medicare program.
Mounting financial losses, as well as changes in federal reimbursement rates, led to Medica’s decision to withdraw its Senior Care Medicare HMO from the four counties as of Jan. 1, officials said.
“We have been in these counties for 15 years,” said Patricia Riley, vice president of government programs at Medica. “To see it come to this kind of end is very tough.”
The decision means about 10,000 people in Carver, Scott, Dakota and Goodhue counties will have to find new coverage by the end of the year.
DFL gubernatorial nominee Hubert Humphrey III and GOP nominee Norm Coleman and GOP attorney general nominee Charlie Weaver say the state needs to push the federal government for changes. DFL attorney general candidate Mike Hatch wants to file a federal lawsuit. They all take issue with disparity in the federal government’s Medicare reimbursements.
Medica is the latest Minnesota health-care provider to cut Medicare HMO service. More could follow as Medicare undergoes an overhaul and health-care costs rise.
Medica will offer the affected members its Medicare Select program, which isn’t an HMO. Members can also join another Medicare HMO if it’s offered in their county, buy supplementary insurance known as Medigap, or revert to traditional Medicare.
Members of Medica’s Senior Care programs in Hennepin, Ramsey, Anoka and Washington counties won’t be affected, nor will those enrolled in Medica’s Senior Care Secure plan, which is offered in many counties.
Experts say the next 15 months will be a time of uncertainty for Medicare HMOs, both in Minnesota and across the country, as federal regulations take effect and as Congress wrestles with how to deal with the program’s increasing costs.
National managed-care firms, including United HealthCare Corp. of Minnetonka, already have announced that they will discontinue or stop marketing Medicare HMOs in several counties.
HealthPartners, the second-largest Medicare HMO provider in Minnesota behind Medica, said it isn’t pulling out of any counties, but it probably will make changes.
Pam Lux, a HealthPartners spokeswoman, said the company broke even on Medicare business last year and is considering raising premiums, changing benefits or cutting back on doctors.
Blue Cross and Blue Shield of Minnesota wouldn’t comment on whether it would follow Medica’s lead.
The primary problem has been low reimbursement rates in rural areas and states with lower health-care costs, such as Minnesota. Riley said many clinics in the four counties opted out of Medica’s Medicare HMO network because of the low reimbursement.
The federal government pays $763 per month to health plans in Miami for every Medicare recipient. By contrast, the rate is $414 in Hennepin County and $367 in Carver and Goodhue counties, and Duluth, Moorhead and St. Cloud.
Congress recently passed legislation to increase reimbursement rates for Minnesota, but didn’t appropriate enough money to fund those increases.
Riley will testify Friday before a congressional committee in Washington.
Humphrey said the state should form coalitions with other states and HMOs to push Congress to change the reimbursement rates.