MEDICARE+CHOICE: Premiums to Go Up, Benefits Down
"[F]euling a perception in the Clinton administration and among some in Congress that the managed care industry is an unstable partner for the government," Vice President Al Gore yesterday released a study before the American Medical Association showing that Medicare HMO premiums will go up next year, and HMOs will be less willing to pay for prescription drugs. The HCFA report notes that average monthly premiums will triple next year, from $5.35 to $15.84. Moreover, none of the 262 HMOs that accept Medicare patients will pay for the full cost of beneficiaries' drugs next year, "with nearly one-third refusing to pay for more than $500 worth of drugs a year." Gore said the "analysis underscores the need for" President Clinton's Medicare reform plan (Goldstein, Washington Post, 9/23). Chip Kahn, president of the Health Insurance Association of America, said, "It takes a lot of chutzpa for the president and the vice president to criticize private Medicare HMOs for having to pass along cost increases exacerbated by the cuts in payments contained in the Balanced Budget Act of 1997 ... [when] the administration has not proposed changing the revenue cap that restricts government funding to most Medicare HMOs to an average annual increase of around 2%" (HIAA release, 9/23).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.