HMOs decry amount of Medicare funding

Coverage for 700,000 might end, survey finds


WASHINGTON - The association representing managed-care health plans warned yesterday that its members are likely to drop coverage of more than 700,000 people on Medicare.

The reason, the group said, is that the government pays the plans too little per patient.

"The numbers are staggering and tragic," said Karen Ignagni, president of American Association of Health Plans, at a news conference. "For hundreds of thousands of Medicare beneficiaries, today is the day Washington has failed them."

Ignagni released a survey conducted by the Washington-based polling firm, Peter D. Hart Research Associates Inc.

The study showed that 18 of 37 health plans responding to the survey said they will drop coverage of Medicare patients in at least one area or region they serve.

The 37 plans represent about 85 percent of all Medicare beneficiaries enrolled in managed-care plans.

All told, 711,055 beneficiaries will be affected, Ignagni said. That's 11 percent of the 6.2 million Medicare beneficiaries who have signed up with managed-care plans, or health maintenance organizations (HMOs), and 1.8 percent of all 39 million people in Medicare, the government's health system for the elderly and disabled.

The release of the survey was the latest salvo in the HMOs' battle to get Congress to approve more Medicare funds for them. The fight is likely to last until Congress adjourns this fall for the November elections.

Late yesterday, the Clinton administration played down the managed-care industry's dire predictions.

"Medicare beneficiaries who are affected by plans leaving Medicare should remember that no matter what, they are still covered by a strong Medicare program," said Nancy-Ann DeParle, administrator of the Health Care Financing Administration, which runs Medicare.

The number of people now receiving health care through managed-care plans has doubled since the end of 1995.

Medicare plans

A graphic in yesterday's editions of The Sun was incorrect. A corrected version follows.

Republican Democratic

Takes effect:...2003...2003

Monthly premium:...$37...$25

Annual deductible:...$250...None

Co-payment:...50%, up to $2,100...50%, up to $2,000

Annual cap on drug expenses...$6,000...$4,000

Total cost over 5 years...$40 billion...$100 billion

- Sun national staff

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