Near the end of an hour-long seminar on Carilion Clinic's new Medicare health plan, an elderly couple got up to leave.

"We might be moving to Arizona," the woman explained as she and her husband shuffled out of the conference room of a Roanoke hotel.

But for thousands of other elderly who either can't or don't want to move to a retirement haven, this year's enrollment period for Medicare benefits comes with a new option -- and lots of questions.

Carilion is introducing a new insurance plan under the federal government's Medicare Advantage program that is aimed at anyone 65 or older who lives in an eight-county swath of Southwest Virginia served by the health care system.

Through an advertising blitz that has included newspaper ads, direct mailing, radio spots and billboards, Carilion is encouraging people to attend informational sessions such as the one Nov. 20 at the Sheraton Roanoke Hotel & Conference Center.

Carilion is hoping to enroll about 3,000 patients for the program's first year. But only about 100 have signed up since Nov. 15, the beginning of an enrollment period that lasts through the end of the year.

"I haven't seen an explosion of applications at this point, but that's not surprising, because we're breaking in a new product," said Terry Shilling, executive director of the plan. Enrollment is expected to ramp up as the deadline nears.

Shilling said interest in the plan has been high -- more than 400 people have attended seminars so far -- but many people are taking the information home and then calling back with additional questions.

People with questions are also calling Shannon Abell, director of senior services at the LOA Area Agency on Aging.

"They have created a stir," Abell said of the nearly full-page ads touting the plan that have been running in local newspapers. "I think it's caused some confusion among seniors."

Some people who are treated by Carilion doctors are worried that they might have to change Medicare plans. Abell has assured those people that if they are happy with their current plan, there's no need to switch.

Volume drives efficiency

Under Medicare Advantage, private health plans enter into contracts with the government that allow them to offer coverage to enrolled patients that includes more benefits than traditional Medicare. The new program at Carilion is set up as a health maintenance organization and offers three tiers of coverage from a network that includes seven hospitals and more than 600 physicians.

In Roanoke, nine insurance companies sell 29 different Medicare Advantage plans, Abell said.

But the number of providers will soon decrease, in part because the Obama administration wants to reduce federal funding to Medicare Advantage because it pays more to private plans than the traditional fee-for-service Medicare.

Some insurance companies -- including Virginia Premier, Wellcare, Coventry and Healthnet -- will pull out of the Medicare Advantage market at the end of the year, creating a void that Carilion hopes to fill.

"I think it makes a lot of sense, as we move toward health care reform," for Carilion to offer a plan now, said Doug Gray, executive director of the Virginia Association of Health Plans.

Unlike the insurance plans getting out of the business, Carilion has its own network of hospitals and physicians and a large base of patients already on a Medicare program of some kind.

"Volume really drives efficiency," Gray said. "Lots and lots of fragmented health plans are a lot harder to manage than having a large volume in one place."

However, those who enroll in Carilion's plan would pay higher deductibles and co-payments if they go to a physician who is not a part of the network.

Competitor launches own ads

Doctors at Lewis-Gale Medical Center in Salem are not included in the network, prompting the hospital's owner, HCA Virginia Health System, to launch a counteroffensive advertising campaign.

HCA's newspaper ads, which began running a week or so after Carilion's first appeared, include a photograph of a grim-looking older couple -- a stark contrast to the smiling man and woman featured in the Carilion ads. Below the unsmiling couple are the words: "Before choosing a Medicare Advantage plan, check the details."

"This is just a turf war in my mind," Abell said of the competing messages.

The counter ads are intended to warn patients that they could lose their access to HCA doctors and facilities unless they pay out-of-pocket expenses that could be thousands of dollars, said Nancy May, a spokeswoman for HCA.

Carilion officials say the 600 physicians in the network include 131 who are not employed by the health care system. But that leaves many more physicians in the coverage area out of the network.

"We have a lot of independent physicians who prefer to use our facilities for their patient care, so we would really encourage their patients to make sure, before they sign up, whether or not their physician is participating in that plan," May said.

Although Lewis-Gale does not offer its own HMO-type Medicare Advantage plan, it participates in plans from private companies. HCA also operates hospitals in Alleghany, Montgomery and Pulaski counties.

The Carilion HMO is available only to people who live in the cities of Bedford, Lexington, Radford, Roanoke and Salem and the counties of Bedford, Botetourt, Craig, Floyd, Franklin, Giles, Montgomery and Roanoke.

Second attempt at health plan

This is not the first time Carilion has ventured into the HMO arena.

In the late 1990s, the health care system offered a managed-care plan to patients of all age groups. The plan was discontinued in 2004 because not enough people enrolled for it to make a profit.

Shilling said the latest plan is different because it won't need as many members to be viable. Not only that, he said, it's a Medicare program instead of a commercial one.

Since Carilion converted to a clinic model several years ago and began to acquire more independent practices, critics have accused the nonprofit -- already the region's largest employer and health care provider -- of trying to create a monopoly that will result in higher medical bills.

Those concerns were on the mind of Russ Hoag when he attended one of Carilion's recent seminars.

Hoag, a retiree who recently moved to Roanoke and is shopping for a plan to replace the one that had been provided by his former employer, is uncomfortable with the notion of a health system being in the insurance business.

"It's like the fox guarding the hen house," Hoag said. "It doesn't make sense."

Shilling countered that Carilion can make local decisions based on local needs, unlike an out-of-town insurance company. And by offering a managed care plan, Carilion can allow its patients to customize their own benefits plan.

"We want to manage the overall health of our members, and we think that offering this kind of plan, particularly for our senior members, is a good way to provide coordinated, cost-efficient, quality-oriented care," he said.

Gray, of the Association of Health Plans, agreed.

"It makes a lot of sense," he said, "and lot of good things can come from this."