The most devastating blow comes because a large number of those stricken from the rolls by the HMOs, which are capitalist companies that make their profits from health care, will lose prescription drug coverage. Many workers and farmers on Medicare have joined HMOs to receive outpatient drug benefits, something not usually available from other plans.

In addition to those denied coverage starting in 2001, another 734,000 Medicare recipients were barred from HMOs over the previous two years.

An official for the Ohio Senior Health Insurance Program, a state-run agency, told the New York Times that they were receiving 800 to 1,000 calls a week from elderly and disabled people asking for advice on what to do, faced with loss of their coverage.

The federal government was informed of these moves last summer. Companies that have contracts with the government for Medicare beneficiaries were required to inform federal officials last July if they intended not to continue coverage the following year. A survey conducted by the American Association of Health Plans, an industry group, found last June that 18 large HMOs had reported to the government their decision not to renew contracts. In the end, 65 HMOs did not renew contracts and 53 other health plans withdrew from selected counties. Some 16 percent of the 39 million people covered by Medicare belonged to an HMO last year.

Karen Ignagni, president of the American Association of Health Plans, said the companies were pulling out of numerous counties in states across the country because they had been "overregulated and underpaid." William Donaldson, chairman of insurance giant Aetna, Inc., said the company decided to "exit certain Medicare markets" because "inadequate government reimbursements have made operating a number of our Medicare HMOs no longer viable."

Another industry official said that government payments to the companies have "gone up 2 percent a year while expenses have gone up 10 percent a year" and that an additional $15 billion needed to be paid to the companies over the next five years to cover claimed Medicare shortfalls.

An additional $10 billion spread over five years was approved by Congress in the final appropriations bill signed by U.S. president William Clinton in mid-December. A White House press statement said the legislation "addresses the needs of health care providers" who were affected "by the disproportionate cuts of the Balanced Budget Act of 1997 by increasing Medicare and Medicaid reimbursements to hospitals, home health agencies, skilled nursing facilities, managed care plans, and other health care providers."  
 
Loss of drug coverage
Losing HMO coverage will leave tens of thousands of people without prescription drugs they need to live. Drug benefits covered 68 percent of people on Medicare enrolled in HMOs. A person dropped from a plan can return to "fee-for-service" Medicare, but without drug coverage. Supplemental plans known as the "Medigap" plans do not cover drugs either and costs can run high--up to $418 a month in Ohio, for instance. News reports cite examples of workers being denied supplemental drug coverage under these plans because they have a history of regular prescription drug use.

Just finding and affording coverage is increasingly hard for workers on Medicare. For example, as recently as two years ago 70 percent of HMOs charged no monthly fee for Medicare plans. Today, that number stands at 42 percent. Aetna U.S. Healthcare in southern Ohio is now charging between $91 and $107 for monthly premiums, after charging nothing when it started offering plans in 1998. Company officials cited demands for higher reimbursements by a large hospital chain in the region as the reason for instituting the charges.

The growing trend by HMOs to drop Medicare adds to the already worsening health care conditions in rural areas. Some 31 percent of those across the country dropped by HMOs have no other health maintenance plan offered in the area. And in rural areas, 94 percent of those now without a plan have no HMO they can join.

A large percentage of the worst-paid sections of the working class are without any health coverage. A U.S. Census Bureau report says that one-fifth of all children officially living in poverty lacked health coverage as do one-third of all workers in poverty. According to the report, half of all workers holding a regular job and living in poverty lack health insurance. The number of people without insurance rose by nearly one million a year since 1987 , hitting a record 16.3 percent in 1998. That number declined slightly in 1999 to 15.5 percent, largely due to an increase of people with health insurance through their employers.
 
 
Related article:
Capitalist 'health-care' system  
 
 
Front page (for this issue) | Home | Text-version home