Harvard Pilgrim Health Care has notified
customers that it will drop its Medicare Advantage health insurance
program at the end of the year, forcing 22,000 senior citizens in
Massachusetts, New Hampshire, and Maine to seek alternative
supplemental coverage.
“We became
concerned by the long-term viability of Medicare Advantage programs in
general,’’ said Lynn Bowman, vice president of customer service at
Harvard Pilgrim’s office in Quincy. “We know that cuts in Medicare are
being used to fund national health care reform. And we also had
concerns about our ability to build a network of health care providers
that would meet the needs of our seniors.’’
Under
Medicare Advantage plans, the federal government pays private health
insurers to sell customers over 65 years old enhanced policies, many of
which offer prescription drug coverage not covered by standard
Medicare. But the US Centers for Medicare and Medicaid Services has
been seeking to reduce the amount it pays to private insurers for such
programs.
Medicare told
Harvard Pilgrim to notify customers that its Medicare Advantage
program, known as First Seniority Freedom, was being canceled. In a
mailing, the insurer was required to list alternative Medicare
Advantage plans, including those offered by its competitors.
Harvard
Pilgrim in a second mailing this week will urge customers to switch to
a new Medicare Supplement plan it will begin offering in October.
Unlike Medicare Advantage, which is overseen by the Centers for
Medicare and Medicaid Services, the new Harvard Pilgrim plan will be
overseen by the Massachusetts Division of Insurance.
It
will be “slightly more expensive’’ than the Medicare Advantage plans,
but competitive with supplemental insurance plans offered by rivals
such as Blue Cross Blue Shield of Massachusetts, the state’s largest
health insurer, Bowman said.
She
said the Medicare Supplement plan will feature some benefits not
covered by the current plan, such as fitness reimbursements, but won’t
pay for prescription drugs, which are covered by some versions of the
current plan. Instead, seniors can buy separate supplemental drug
coverage through a partnership with Coventry Health Care, in Bethesda, Md.
As of yesterday afternoon, about 1,000 customers had sought information about the product change.
Newton
resident Robert Gray, 68, a retired computer engineer and technology
researcher, said he was disturbed to find out his plan was being
discontinued. But he said he prefers to remain with Harvard Pilgrim
because he is a longtime customer.
“If
there’s a big increase in price or the various options in the new plan
don’t seem to be the same . . . we might consider going to another
plan,’’ Gray said.
More
than 60 percent of senior citizens in Massachusetts are covered only by
Medicare, according to Harvard Pilgrim research. Those who buy
supplemental insurance are divided roughly evenly between Medicare
Advantage and Medicare Supplement plans.
Robert Weisman can be reached at weisman@globe.com. 
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