The increased payments - ranging from 9 to 22 percent in the Tampa Bay area - should translate to lower premiums, officials say.
By STEPHEN NOHLGREN
Published January 21, 2004
More generous benefits are coming to Medicare HMOs, but not for another six weeks or so.
The Bush administration announced Tuesday that private health plans serving Medicare enrollees will receive payment increases averaging 10.6 percent nationwide, beginning March 1.
In the Tampa Bay area, where half a million people are on Medicare and about 140,000 are enrolled in Medicare HMOs, the increases will range from 9 percent in Pasco County to 22 percent in Hernando. Pinellas HMOs will receive an 18 percent increase; in Hillsborough it will be 14 percent. By loosening Medicare's purse strings, the White House hopes to keep private HMOs competitive with Medicare's traditional fee-for-service programs. In the past, HMOs often dangled prescription drug benefits to attract members. But with traditional Medicare due to begin offering its own drug benefit in 2006, HMOs stood to lose that competitive edge.
Now, with the extra federal money, Medicare HMOs should be able to reduce premiums, deductibles and copayments, offer richer drug benefits, and bolster their network of doctors, hospitals and outpatient services, administration officials said.
"We want beneficiaries to have a range of reliable alternatives so they can choose the coverage options that serve them best," HHS Secretary Tommy G. Thompson said in a release. "This . . . addresses a long-standing concern by seniors who prefer managed care plans."
Administrators with HMOs in the region say it's too early to say precisely how the new federal payment levels will change the benefits they offer.
But it's assured that members will see definite improvement, said Donna Burtanger, spokeswoman for WellCare Health Plans, whose Medicare HMO serves about 22,000 Tampa Bay residents. Toward late February, the company will hold seminars and advertise its new benefits, she said.
Humana Inc., which provides coverage in portions of Pinellas, Hernando and west Pasco, was already changing its HMO products, pending Medicare approval, said spokeswoman Valerie Kennedy.
"Any additional revenue will go toward . . . enhancing benefits, reducing copay, reducing out-of-pocket expenses and enhancing the network for greater access," she said.
The new payment structure reflects a marked philosophical difference along the political spectrum.
The Bush administration, the Republican-controlled Congress, and a few Democrats have long wanted private insurers to compete with the federal government for the Medicare dollar. Private companies can deliver health care more efficiently, they say, and Medicare needs to expand its reliance on private companies before soon-to-retire baby boomers swamp the system.
Most Democrats and a few Republicans say traditional Medicare is working just fine, with very little administrative overhead. They say Medicare HMOs flourish only when they cherry-pick the youngest, healthiest beneficiaries. In the past, cutbacks in federal payments to Medicare HMOs led many to scale back benefits. Some left the market, as happened in Hernando County, which briefly lost its Medicare HMO before recent payment increases lured companies back.
The new payment levels would give the HMOs a monthly payment for each member that is equal to, or slightly higher than, what Medicare typically doles out to individual doctors, hospitals and other providers to treat people, said Medicare spokesman Peter Ashkenaz.
Paying HMOs any more than traditional Medicare undermines the federal program, contended Robert Hayes, president of the Medicare Rights Center, an advocacy group.
"Private plans should compete with traditional Medicare on a level playing field," Hayes said. "If private plans are more economical or more efficient, why does the administration need to pay them more?"
HMOs have until Jan. 30 to submit their new benefit packages to Medicare, said Ashkenaz.
"We are going to approve them as fast as we can," he said. "We have to be ready to start the new program March 1."
If you go
Enhanced benefits for Medicare HMOs are coming, but individual insurance companies must first submit their new premiums, deductibles and benefits to Medicare for approval. As of March 1, details will be available. Here's how to find out what they are: Humana: 1-800-443-1702 in Hernando, Pinellas and West Pasco; 1-800-421-2491 in Hillsborough and East Pasco
UnitedHealthcare: 1-800-711-6088 for current members in Hernando, Hillsborough, Pasco and Pinellas. 1-800-973-6467 for potential enrollees.
Universal Health Care: 1-866-690-4842 in Hernando.
Quality Health Plans: 1-866-747-2700 in Hernando and Pasco.
WellCare Health Plans: 1-888-888-9355 in Hernando, Hillsborough, Pasco and Pinellas.
Call the federal government's toll-free information service: 1-800-Medicare.
Check Medicare's Web site: www.medicare.gov Click on Medicare Personal Plan Finder and enter your ZIP code. Comparisons will be on the Web site beginning March 4.
Citrus County is not currently served by Medicare HMOs.
