AAHP Says Insurers Need More Medicare+Choice Funding

The president of the American Association of Health Plans said yesterday that the "downward spiral" of Medicare+Choice will continue next year unless Congress increases federal payments to health plans, CongressDaily reports. Speaking to reporters, Karen Ignagni said that because the budget process means Medicare legislation is typically acted upon in the fall, Congress is "basically ensuring more benefit takeaways in 2002, which is an election year," unless it enacts increased payments before it recesses this year. Her comments followed the release earlier this week of a General Accounting Office report concluding that the Medicare funding "giveback" provided by Congress last year had not led health plans to expand benefits or service areas (Rovner, CongressDaily, 12/5). Many House Democrats said the report was evidence that giving more money to Medicare+Choice plans is not a solution for the program's ailments. "Congress continues to pour more money into the coffers of Medicare HMOs in hopes of providing better care to America's seniors, but the HMOs keep stranding hundreds of thousands of beneficiaries annually by either leaving the program or dramatically reducing benefits," Rep. John Dingell (D-Mich.) said, adding, "It is foolish to even consider throwing more money at this failed system" (Carter, AP/Nando Times, 12/5).

But Ignagni, calling the report "flawed and incomplete," said that last year's funding for health plans "was never intended to solve the program's entire problem." Moreover, she said, more than two-thirds of the money was "targeted" toward areas that serve only 23% of Medicare managed care enrollees. Responding to the report's finding that 83% of managed care plans used the extra funds to bolster their provider networks or increase provider payments, Ignagni said, "Our provider costs have been increasing dramatically. You can't have a program if you don't have a provider network" (CongressDaily, 12/5). HHS announced in September that 58 health plans will withdraw from Medicare+Choice or reduce services in 2002, affecting 536,000 seniors. "When are members of Congress going to recognize that plans only pull out of programs that are not working?" Ignagni asked (AP/Nando Times, 12/5).