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Most elderly Californians will have choices next year despite eight HMOs not renewing Medicare contracts

OAKLAND, Calif.--(BW HealthWire)--July 21, 2000--The large
majority of the 1.5 million Californians enrolled in Medicare managed
care will continue to have a choice among health plans next year and
will not experience significant reductions in access to care,
according to an analysis by the California Medicare Project, a program
of the Oakland-based California HealthCare Foundation.

While one managed care plan is expected to discontinue all its
Medicare contracts in 2001 and seven others will reduce the number of
counties served, more than 96% of beneficiaries affected by these
withdrawals will have at least two other managed care options
available next year.

"The plans that are not renewing their contracts will affect about
57,000 Californians," Jack Christy, director of CHCF's California
Medicare Project, said. "The only site in which no other managed care
option will be available next year is Merced County, in which there
are about 3,100 enrollees." Christy noted that the county's
beneficiaries will still be covered under traditional fee-for-service
Medicare, although they no longer will have coverage for prescription

"The stability of the Medicare managed care market in California
is due in large part to the fact that the two plans that cover more
than 70% of the Medicare managed care market - Kaiser Permanente and
PacifiCare -- are renewing all of their existing Medicare contracts,"
Christy noted.

The impact analysis was done in response to an expected
announcement this week from the federal Health Care Financing
Administration regarding the health plans that have reported they will
not renew their contracts to provide Medicare coverage for 2001.
Several California health plans had previously acknowledged that they
will withdraw from counties they currently cover. One plan, CIGNA, is
leaving Medicare managed care in California entirely. Seven are
reducing the number of counties in which they offer Medicare coverage:
Aetna, Blue Cross, Blue Shield, Health Net, Maxicare, National Health
Plans, and UCSD.

Counties in which at least one contract will not be renewed are:
Alameda, Contra Costa, El Dorado, Fresno, Los Angeles, Madera, Merced,
Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San
Francisco, San Joaquin, San Mateo, Santa Clara, and Sonoma.

"A number of factors go into a health plan's decision to stay in
or leave a county -- the willingness of local providers to contract
with a plan, size of the beneficiary population, and the rate of
reimbursement from Medicare. Previous decisions to withdraw were
dominated by considerations of the first two factors. For 2001,
however, reimbursement rates appear to be playing a bigger role in
decisions," according to Christy.

The full analysis is available at www.chcf.org or by phone request
at 510/238-1040. Called the California Medicare Project Snapshot,
the analysis charts county-by-county, the effects of changes in HMO
service areas on Medicare beneficiaries, noting other options
available, if any, for health care and prescription drug coverag.

The California HealthCare Foundation is a nonprofit philanthropy
whose mission is to expand access to affordable, quality health care
for underserved individuals and communities and to promote fundamental
improvements in the health status of the people of California. The
Foundation was established in 1996 as a result of the conversion of
Blue Cross of California from not-for-profit to for-profit status. For
additional information on the foundation's programs, visit the Web
site at www.chcf.org.

Run dates: 2000-07-21 - 2000-07-28

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