MEDICARE+CHOICE: HIAA Says Program Holds Empty Promise
The Health Insurance Association of American submitted formal comments yesterday to the Health Care Financing Administration, saying that provisions in the Balanced Budget Act of 1997 "could turn Medicare+Choice into an empty promise." HIAA President Bill Gradison asserted, "Medicare+Choice promises to be a 'win-win' program because it would give beneficiaries more choices and opportunities to receive more benefits; and it could, over time, help the Medicare program realize cost savings." However, the "ambitious" timetable established by Congress for implementing some features of Medicare+Choice may do more harm than good, said Chip Kahn, HIAA's CEO and president-designate. He said that the "one size fits all" quality requirement regulations imposed by HCFA would hinder innovations and market-based solutions from health plans. "Insurers believe that consumers ought to have market-based consumer protection," he stated, "Overregulation, though, could stifle choice and ultimately harm consumers." In addition, Kahn notes that Medicare+Choice's provision that caps payment rate increases for private plans at 2% creates difficulties for plans struggling to keep pace with expected increases in health care costs. He implores HCFA officials to address the issue and avoid "a reduction in access and choice of coverage of Medicare beneficiaries, or a reduction in the economic value of their coverage" (HIAA release, 8/17).
Humana Flees From Florida
The St. Petersburg Times takes a look at Humana Inc.'s decision to withdraw from the Medicare HMO market in two Florida counties, driven away by low reimbursement rates and start-up difficulties. Humana's decision to leave Sarasota and Manatee counties follows in part from its failed merger with United HealthCare. "We probably stuck around in certain markets longer than we should have because we expected certain synergies ... [b]ut now we see no possibility of succeeding in Sarasota." The Times notes that Humana's failure to thrive in the two markets, while it continues to profit in Tampa Bay, which is "just miles away," illustrates "the complex dynamics of making money on health care for the elderly." And Humana's difficulties "rais[e] serious questions about whether the federal government will ever reach its goal of moving more seniors to [Medicare+Choice] plans" (Hundley, 9/18).