MEDICARE HMOs: Market Exodus Expected To Continue
National Journal reports that HHS officials are "bracing" for a second round of Medicare HMO pullouts. And while "their numbers may not be as high as they were last year, many more HMOs are considering whether to reduce benefits or raise premiums." The pullouts, which impacted 400,000 seniors last year, have "raised serious questions about the role of managed care in Medicare, particularly since most Medicare-reform proposals assume a more prominent role for managed care." American Association of Health Plans President Karen Ignagni said she does not expect pullouts to be as widespread as last year, primarily because "there's a new law that says any health plan that leaves Medicare must stay out for five years," and because some paperwork requirements have been eased. Also, a "payment calculator that's expected to lower reimbursements" has been delayed. But she said the underlying problem would not be solved unless Congress raised reimbursement rates. HCFA says it has approved 10 new health plans for 1999 and "is reviewing 30 additional applications," including some for counties that previously had very low levels of managed care penetration (Serafini, 5/14).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.