HealthLeaders-InterStudy, a leading provider of managed care and healthcare industry intelligence, reports that the highly touted regional Medicare PPOs -- billed as a way to give senior citizens throughout the country a managed care option -- are a bust. However, private fee-for-service plans, which are more tailored to local areas, are soaring in popularity.
According to 2006 enrollment figures released by the Centers for Medicare and Medicaid Services, through August 1, the Medicare Advantage PPOs had attracted just 89,500 members nationally, out of a total of about 43 million Medicare beneficiaries. Private fee-for-service, or PFFS plans, had signed up more than 750,000 lives during the same time period.
"The market has spoken, and clearly consumers prefer private fee-for-service plans that are tailored to specific locales rather than regional PPOs that must sell uniform offerings over large areas," says Jane DuBose, director of health plan analysis at HealthLeaders-InterStudy. "Companies with PFFS plans can pick and choose attractive segments of a region's population for targeted products."
Local PPOs and HMOs can do the same. Private fee-for-service plans allow members to see any physician who sees Medicare patients. Regional PPO plans require members to see doctors within the PPO networks or pay more to go outside the network. The regional Medicare PPOs -- as well as Medicare prescription drug plans -- were created as part of the Medicare Modernization Act and launched this year. The federal government designated 24 regions for the Medicare PPOs, some encompassing single states and others with multiple states.
Humana Inc., which is offering a wide range of Medicare products, has proven to be a big winner with PFFS plans, with more than 450,000 members across the country. Meanwhile, its regional PPOs have just about 32,000 members. Of the other regional PPOs, UnitedHealthcare (which includes its acquisition PacifiCare) enrolled about 31,000 members in three states as of August 1, with 24,000 of them in Florida.
Elsewhere for regional Medicare PPO enrollment: * Blue Cross Life & Health (part of WellPoint) pulled in more than 16,000 enrollees in the California region; * WellPoint's Anthem Insurance Companies enrolled about 3,700; * Wellmark, through Blue Cross Blue Shield Northern Plains Alliance, drew some 1,400 members from the largest swath of rural area covering the states of Iowa, Minnesota, Montana, North Dakota, South Dakota and Wyoming; * Health Net got about 1,500 members in Arizona; * Instil Health Insurance (BlueCross BlueShield of South Carolina) signed about 1,200 members in South Carolina and Georgia; * Sierra Health and Insurance enrolled more than 1,000 members in Nevada; * Aetna enlisted about 800 members in New Jersey, Maryland, Delaware and Washington, D.C. About HealthLeaders-InterStudy
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