MEDICARE+CHOICE: Roth/Moynihan Bill Would Tweak Program
The Senate Finance Committee will take up legislation to address implementation problems with the Medicare+Choice program, said committee chair Sen. William Roth (R-DE) yesterday in announcing a draft summary of the legislation with co-sponsor Sen. Daniel Patrick Moynihan (D-NY). The Roth-Moynihan Medicare+Choice Program Improvement Act comes in response to last year's exodus of Medicare HMOs that left nearly 500,000 seniors scrambling for alternatives and "50,000 with no other choice of managed care plan," CongressDaily reports. According to a draft summary of the proposal, the bill would make it easier for beneficiaries to regain Medigap coverage to supplement Medicare fee-for-service coverage if they are left to fend for themselves after their HMOs drop out of the Medicare market. The bill will likely include a provision to push the date back, from May 1 to July 1, by which HMOs must submit their plans for Medicare participation for the next year. Further, plans would only be locked-out of Medicare for three years, "rather than the five years stipulated in the balanced budget law" (Rovner, 3/17). The legislation would also "allow plans to offer different benefit packages in different service areas, a change proposed by the Medicare Payment Advisory Commission (MedPAC) in March (Rovner, Reuters Health, 3/18).
PacifiCare's Medicare Woes
PacifiCare Health Systems Inc. said yesterday that its Medicare HMO, Secure Horizons, is contemplating product adjustments because its expected 3.5% Medicare payment increase next year will not offset rising costs. While the increase is "better than expected," David Erickson, PacifiCare's director of investor relations, said that it will nonetheless "probably fall short of Medicare cost trends." As a result, the company will consider adding supplemental premiums, hiking copays and trimming benefits to shore up profit margins. Erikson said, "We need to find ways to bridge that gap. Unfortunately, that will impact Medicare beneficiaries" (Rundle, Wall Street Journal, 3/18). Chair and CEO Alan Hoops said that despite the 3.5% increase, "cost trends in a number of medical categories are running at or above this 3.5% level" (PacifiCare release, 3/18).