As he neared 65, Gordon Hill envisioned a retirement filled with languid days of puttering around his lush garden in rural St. Mary's County and planning an occasional trip with his wife, Lucy--maybe to Hawaii or Europe.

Instead, the Hills aren't sure today whether they can even afford a cypress tree they want for their garden. And when Gordon, now 68, and Lucy, 70, talk, it's often about the persistent health-insurance nightmare they face.

In the last five years, three Medicare health maintenance organizations have dropped the couple and stopped offering coverage altogether in St. Mary's. Their latest insurance company--Blue Cross Blue Shield--is joining a growing number of managed-care plans that are pulling out of rural areas across the United States.

This is not the retirement the Hills dreamed about.

"The whole situation with health insurance has caused my life to change where I don't know from one year to the next what's available and, 'Can I afford it?' " Gordon Hill grouses. "My life is out of my hands. I can't do anything without fear." The Hills are working their way through a health-care tangle shared by many of the 327,000 elderly and disabled clients nationwide--including 15,521 in Maryland and 13,929 in Virginia--who will be dropped by managed-care plans this year, according to the Health Care Financing Administration.

Industry officials say low reimbursement rates, a smaller-than-expected volume of enrollees and competition with other insurers are forcing HMOs to pull out of markets across the country, particularly those in rural areas.

For Gordon Hill, this means he--like nearly 30,000 other elderly HMO patients in Maryland and Virginia--will lose any other managed-care options and will have to fall back on Medicare for health care coverage.

Black reading glasses sit atop a thick stack of health-care literature on the couple's kitchen table. Careful and frequent pencil notations indicate the hours spent poring over these jargon-filled documents to decipher the intricacies of health insurance plans, and the options once they're gone.

Seniors who once benefited from the savings that managed-care plans can offer will now pay up to triple what they used to for prescription drugs, will have to foot the bill for physical examinations and will have no coverage for vision, hearing or dental visits. The back surgery Hill needs will just have to wait until he is transferred back to Medicare and he can determine how much Medicare will cover, and how much he'll have to pay himself.

The American Association of Health Plans, a trade organization for managed care, has launched an extensive campaign to lobby Congress to increase government reimbursements to Medicare HMOs. Government reimbursement rates to HMOs are generally higher in more densely populated urban areas and lower in rural areas.

In Southern Maryland, for example, the federal government reimbursed Blue Cross Blue Shield $426 a month per HMO Medicare patient, compared with $525 a month for patients in more urban counties and Baltimore.

Industry officials say they recognize the hardships created when managed care has to drop coverage. But that's little comfort to people like Julia T. Dooley, 72, who was infuriated when she heard on the radio earlier this year that Blue Cross Blue Shield planned to leave town. She had signed up for that coverage after she was dropped by NYLCare.

"I thought, 'Here I go again.' It's not fair for the federal government to pay [more] for some counties and not pay for others. And if we have to pay, let us all pay."

Del. John F. Wood Jr. (D-St. Mary's) said his office has received two dozen or more phone calls in the last two months from worried Medicare HMO clients in Southern Maryland. He can't help, he tells them, because "the only people who can change this are in Congress."

The stories of elderly HMO patients in rural counties are often dispatches about decades of hard work with dreams of an easier life that were marred by health care worries.

Priscilla Hotaling, 72 and diabetic, was dropped from NYLCare last year, but she couldn't afford to sign up for Blue Cross Blue Shield because of the $75-a-month premium.

Hotaling sold her car to cover her growing medical bills, and eventually her trailer home. Now she lives with her daughter, son-in-law and the couple's five sons in a six-bedroom, A-frame house in Mechanicsville.

In exchange for watching her grandchildren when their parents aren't home, Hotaling lives rent-free with them. But she still has been forced to charge food, school clothes and a washing machine on her credit cards. Her son-in-law helps get her to doctor's appointments and picks up her prescriptions--the cost of which have tripled since NYLCare dropped her.

Hotaling takes her water pills and liver pills and bakes cookies for her grandsons. She keeps life simple and hopes that the cataracts and heart problems that plagued her a few years ago stay far away. In her world, getting sick is not an option.

While the elderly are hardest hit, disabled people younger than 65 and on Medicare face the same difficult decisions about their health care.

Carolyn Billups, 47, is legally blind. When Blue Cross Blue Shield exits St. Mary's County later this year, she will only qualify for two plans--the cheapest at $131.52 a month. Billups, a substitute teacher, would still have to pay out-of-pocket for prescriptions, dental and vision. She sighs and wonders where she will find the money.

"What is steak? What are new clothes?" Billups asked. She hasn't bought any new clothing in five years. She also refinanced the mortgage on her home in rural St. Mary's County, pared down her grocery list and gave up soft drinks. There's nothing left to cut, she said.

So she'll chance it on Medicare, no supplement. It's not a decision, really, because she has no other options.

"I can't get sick," Billups said. "I just pray to God that I don't get deathly ill."