Republican Lawmakers to Propose Legislation to Curb ‘Defections’ from Medicare+Choice

Hoping to prevent more "defections" from Medicare+Choice, Reps. Bill Thomas (R-Calif.) and Nancy Johnson (R-Conn.) plan to introduce legislation to boost reimbursement rates for health plans participating in the program and encourage Medicare beneficiaries to "make cost-conscious medical choices," USA Today reports. The proposal, outlined in a letter sent Aug. 30 to Centers for Medicare and Medicaid Services Administrator Thomas Scully, would increase reimbursements for health plans, including a "special subsidy" to provide prescription drug coverage. Under the proposal, beneficiaries could select a lower-cost plan and receive rebates or select a higher-cost plan, which would require them to pay additional fees. USA Today reports that the proposal will likely "draw fire" from managed care critics, who maintain that Medicare overpays insurers (Appleby, USA Today, 9/4). In 1996, the General Accounting Office, a nonpartisan research arm of Congress, reported that, "the evidence shows that Medicare's payments are too high and that plans turn these excess payments into extra benefits to attract beneficiaries" (GAO Report 99-144, 6/99) The Bush administration announced on Aug. 29 that MCOs participating in Medicare+Choice will drop health coverage for "several hundred thousand" Medicare beneficiaries next year. To help prevent "greater losses," Scully said that the administration plans to ease rules for health plans participating in the program (Kaiser Daily Health Policy Report, 8/30). However, only Congress can boost reimbursement rates for HMOs participating in Medicare+Choice ( Kaiser Daily Health Policy Report, 8/10). In 2001, more than 900,000 Medicare beneficiaries had to enroll in new health plans or return to traditional fee-for-service Medicare after many HMOs withdrew from Medicare+Choice. Scully said that HMOs, which cover 15% of Medicare beneficiaries, have until Sept. 17 to announce whether they will cover beneficiaries in certain markets next year. Scully added that he "sympathizes" with HMOs, stating that "Congress needs to come back and tweak the formula and put the money where the program is popular" (Kaiser Daily Health Policy Report, 8/30).