PALM BEACH GARDENS, Fla., Nov. 8, 2000 -- By year-end 2000, nearly 934,000 seniors on Medicare will be dropped from their HMOs, on top of the 700,000 that were dropped in 1998 and 1999. But unlike the experience of previous years, when most seniors could still find alternative HMOs that might accept them, next year they will have few remaining options, according to a study by Weiss Ratings, Inc.

Among the 237 HMOs reviewed by Weiss that opened their doors to Medicare beneficiaries in recent years, 147 will have fully or partially abandoned the business by December 31. This leaves only 90 HMOs (17% of the HMOs rated by Weiss) that are continuing to maintain their current Medicare business, for now.

Among these remaining 90 HMOs, 37 are losing money. They lost a total of $645 million in 1999, plus another $82 million in the first quarter of 2000. At the same time, 34 have earned a Weiss Safety Rating of D+ ("weak") or lower. Only 22 have earned a Weiss rating of B- ("good") or better.

"Seniors who have been dropped from their HMO should not rejoin another," commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings, Inc. "The latest Medicare withdrawals greatly narrow the viable choices available to seniors down to just a handful of profitable and financially healthy Medicare HMOs, and even many of these may soon be dropping out of the business."

In 1998 and 1999, Weiss Ratings also advised consumers to avoid re-joining HMOs if possible because of continuing losses that were expected to cause HMOs to drop many more Medicare patients in future years. But at that time, a Medicare HMO was considered to at least be a viable choice for those who could not afford more expensive alternatives; today, it is not. Dr. Weiss warns that most seniors will be forced into one of three difficult situations:

1. sub-standard health care under some form of welfare;
2. burdensome spending out-of-pocket for bills that Medicare fails to cover; or
3. Medicare supplement insurance (Medigap) which can often be overpriced.