MEDICARE+CHOICE: Slim Pickings for Rural Recipients
Only 2% of rural Medicare beneficiaries in California have a choice between two or more HMOs, according to a study release today by the Congress of California Seniors and Washington, D.C.-based consumer advocate organization Families USA. The findings call into question the viability of any Medicare reform that relies on competition between HMOs to keep costs down. The study found that 67% of California's rural Medicare beneficiaries have no HMOs available to them, while 31% of beneficiaries have only one HMO in their service area. In a county-based comparison, only one rural county has a choice of more than one Medicare HMO: Mariposa County, which has four. Eighteen of the state's 24 rural counties have no Medicare HMOs, and five are served by just one plan. "This is clear evidence that we can't count on the managed care industry to take care of our state's senior citizens and persons with disabilities," said Lois Wellington, president of the Congress of California Seniors (Congress of California Seniors release, 9/9).
The Families USA study, which examined rural Medicare HMO penetration across the country, found that nationwide, 90% of rural Medicare beneficiaries have no choices between Medicare HMOs. Almost three-quarters (73%) of the nation's 9.2 million rural Medicare beneficiaries "live in counties served by no Medicare HMOs," while 17% have access to only one. Only 10% have a choice between two or more HMOs. On a state-by-state basis, the study reports that only in five states -- Connecticut, Hawaii, Massachusetts, Pennsylvania and Rhode Island -- do the majority of rural beneficiaries have a choice of two or more HMOs. In 13 states, including Idaho, Iowa, Kentucky, Mississippi and South Carolina, there are no Medicare HMOs available at all to rural beneficiaries. Families USA estimates that the problem will only get worse, as "based on currently available data on HMO intentions to withdraw from certain areas, only 23% of rural beneficiaries will have access to an HMO in the year 2000, compared to 27% in 1999."
Reform in Jeopardy?
Contrary to expectations, low government reimbursement rates are not the primary deterrent for rural Medicare HMO penetration. "While the HMO industry claims they do not get enough money to serve these beneficiaries, quite the opposite is true. Several independent agencies have concluded that Medicare HMOs are overpaid by the government," said Families USA Executive Director Ron Pollack (Families USA release, 9/9). Instead, the study says more significant deterrents are the difficulty of recruiting health care providers, wide dispersal of beneficiaries in rural areas, and "the fact that rural beneficiaries tend to be in poorer health" than their urban counterparts (Rovner, CongressDaily, 9/9). Pollack cautioned that the findings should cause congressional leaders to think twice before passing a reform proposal that "would push Medicare toward a more competitive, market-oriented health system," goals championed in both President Clinton's proposal and the plan drafted earlier this year by Sen. John Breaux (D-LA) and Rep. Bill Thomas (R-CA). "If you're going to build a system that's predicated on competition among HMOs, you'd better have HMOs in those areas," Pollack noted (Gibson, Lexington Herald-Leader, 9/10). Click here (www.familiesusa.org) for the full study and county-by-county data.
And Yet It Grows!
Despite the much-dreaded Medicare HMO withdrawals announced this summer and last fall, the number of plans serving Medicare beneficiaries and enrollment in these plans continued to grow in the first half of this year, according to new numbers from HCFA. The number of HMOs with Medicare risk contracts increased from 383 to 402, and the number of enrollees from 6.553 million in January 1999 to 6.863 million in June. This growth rate does, however, represent a drop off from previous year (Health Intelligence Network release, 9/10).