THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, January 5, 1996 TAG: 9601050443
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By DEBRA GORDON, STAFF WRITER
LENGTH: Medium: 70 lines
Sentara Medicare Choice, the region's largest provider of Medicare HMO policies, has stopped covering prescription drugs.
About half of Sentara's 4,800 Medicare Choice members were paying an additional $26 per month for the coverage. Sentara has arranged a 15 percent discount on drugs through Revco Drug Stores, but the policy change, which took effect Jan. 1, still leaves some with much higher out-of-pocket costs and may drive members to another insurer.
``It's sort of like getting a kick in the teeth to discover that this provider of health care for many older people has now welshed on their promise,'' said Dr. John Franklin, director of geriatrics at Eastern Virginia Medical School.
Franklin, himself enrolled in Sentara Medicare Choice, said he encouraged many of his patients to join the HMO specifically because of the prescription drug coverage.
Medicare, the federal health insurance program for the elderly, doesn't pay for prescription medications. Yet about 82 percent of Medicare recipients use prescription drugs regularly, according to the American Medical Association. When managed-care companies entered the Medicare market and provided drug coverage, recipients viewed it as a great new benefit.
It was also a great expense, said Ted Wille, senior vice president with Sentara Health System.
Sentara receives an average of $307 a month from the federal government for each Medicare member it enrolls. Members pay Sentara a $35 monthly premium (not including the fee for drug coverage) and have another $42.50 a month from their Social Security checks sent to the federal government.
But the federal payment, coupled with the supplemental premium, just isn't enough, Wille said. The plan has been on the market since 1991 and still isn't covering costs.
He estimates Medicare Choice needs 10,000 to 15,000 members before it breaks even.
With pharmacy coverage that cost members only another $26 a month, and only 4,800 total members, Wille said, ``we found ourselves offering a benefit that was very rich. In hindsight, knowing what we know now, we could have done a better job thinking that through.''
To continue offering Medicare Choice, he said, the company had to make some changes. Cutting the pharmacy benefit was ``a gut-wrenching decision,'' he said.
It also seems likely to cost the plan membership.
Ava F. Wallace of Portsmouth has been a Sentara Medicare Choice member since March. The prescription-drug benefit was the primary reason she chose the HMO, she said, because she takes four medications every day.
She figures her medicine would cost more than $300 a month. But under the Sentara plan, she paid only a small co-payment.
When she learned her coverage was changing, she immediately switched to the region's other Medicare HMO, Optimum Choice Advantage, owned by Maryland-based MidAtlantic Medical Services.
Optimum Choice is still offering its prescription drug benefit, said supervisor Heidi Phillips. Members pay $25 a month for the benefit and a $10 co-payment for each prescription.
More than 75 percent of Optimum Choice members choose the drug coverage, she said.
``It's a definite selling point,'' she said. ``It's very rare to come across people who are older than 65 who are not taking some types of medications. And when you're on a fixed income, it's very difficult to afford some of those medications.'' by CNB