21st century begins in 1998 for new Medicare plans

Staying Ahead

October 27, 1997|By Jane Bryant Quinn | Jane Bryant Quinn,Washington Post Writers Group

FOR MEDICARE, the 21st century will start ahead of time -- in November 1998, to be precise. That's when a range of new privately managed Medicare plans will be unveiled. This program is going to be known as Medicare Choice.

Everyone, young and old, should be paying close attention. You're going to see a blueprint for what Medicare might become.

There's one little problem. The elderly need to be told, in detail, what their new choices are going to be. Without unbiased information, this new "market" in Medicare plans won't work well. Yet Congress is on the verge of slashing the funds that were promised to help the elderly compare these plans so they can choose the best one.

Under the balanced-budget law, the public-information campaign for Medicare Choice will be run by the Health Care Financing Administration (HCFA), which manages Medicare and Medicaid.

The cost is supposed to be borne by all the privately managed Medicare plans (principally health maintenance organizations). The law set their first-year contribution at up to $200 million, a small fraction of what the HMOs are paid by Medicare each year.

But the HMOs are telling their allies in Congress that they won't pay anywhere near that price.

At first blush, the budget does sound high. But the job is huge. A year from now, about 38 million Medicare beneficiaries are supposed to receive a booklet comparing all of the competing medical plans available.

The booklet will cover traditional Medicare, existing HMOs and any new plans that have started up. Based on what you learn, you'll have to decide which one you want.

So getting good information will be critical. Here's what the law says the HCFA booklet has to do:

Compare all Medicare plans on specified points, such as medical benefits, out-of-pocket costs, emergency care and doctor choice. Some new plans are going to be more expensive than others.

Disclose comparative-quality data for every plan. This includes surveys of patient satisfaction, the rate at which patients quit the plan and data on the percentage of patients who receive preventive care. In the future, you're also supposed to get data on how sick patients fare.

Maintain toll-free telephone lines and an Internet site where people can get more information about the plans. Specialists are going to have to be trained.

The HCFA has been worried that even $200 million won't get the job done in time. Nevertheless, the HMOs' allies in Congress seem ready to chop the consumer-information budget to about $95 million.

The HMOs aren't stopping with cutting the outreach program's total size. They're also angling to pay almost none of it.

Under the law, each Medicare Choice plan (most of them HMOs) is supposed to pay a pro rata share. Congress deemed this fair, because they're the ones the booklets help. Their plan information will be mailed to every Medicare household.

But speaking for the American Association of Health Plans (AAHP), the trade group in Washington, Senior Vice President Rick Smith says the plans should pay about 15 percent of the cost, because they cover 15 percent of the total Medicare population. Apparently, taxpayers should cover the rest.

Medicare HMOs got a windfall from taxpayers this year, thanks to another change in the law.

Medicare HMOs have always been paid in advance for the

patients on their rolls. Adjustments for overpayments were made the following year.

But Congress is letting the HMOs keep last year's overpayments, which, with other accounting changes, came to about $666 million. And even with all this extra money, they don't want to meet their obligations.

Pub Date: 10/27/97

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