MEDICARE HMOs: CLINTON BUDGET COULD OBLITERATE EXTRAS
The extra benefits used to entice seniors out of fee-for-This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
service Medicare and into HMOs are at risk of being eliminated if
the Clinton administration's plans to ensure Medicare's solvency
are adopted, LOS ANGELES TIMES reports. One-third of the $138
million in proposed savings to the program would come from a
reduction in payments to HMOs, which, TIMES reports, would likely
force them to cut extra benefits such as prescription drug
coverage, "dental care, vision care [and] in some cases, health
club memberships," or charge extra for them. House Ways and
Means health subcommittee Chair Bill Thomas (CA) said the
proposed reductions could even force some HMOs to drop out of the
Medicare market.
THE CRUX OF THE MATTER: Duane Dauner, president of the
California Healthcare Association, which represents hospitals and
physician groups, noted that the HMOs are able to provide the
additional benefits "because the payments they get from Medicare
are a lot higher than the cost of providing the services in the
regular Medicare package." TIMES notes that the "federal
government ... believes that same thing" and that the "Clinton
budget next [week] will propose reducing the payment to 90% of
the costs" (Rosenblatt, 1/30).