Federal Appeals Court Rejects Lawsuit Seeking Medicare Premium Relief for Minnesota Seniors

A federal appeals court on Dec. 13 rejected a Minnesota lawsuit alleging that the federal government's method for determining Medicare payment rates for managed care plans illegally discriminates against smaller states, the Minneapolis Star Tribune reports. The 8th U.S Circuit Court of Appeals, denying an appeal by the Minnesota Senior Federation of a lower court's decision, said that while "financial disparities" exist in Medicare+Choice, Congress "was not irrational or arbitrary" in devising the program's payment formula, which provides higher rates in regions where medical costs are high (deFiebre, Minneapolis Star Tribune, 12/14). Minnesota Attorney General Mike Hatch (DFL) initiated the lawsuit in 1999, saying his goal was to "equalize" Medicare+Choice rates across the country. Hatch and the senior federation alleged that the "unequal federal payments create undue -- and unlawful -- hardships for seniors, especially those who cannot afford high Medicare HMO premiums but need the insurance that HMOs provide." The suit did not seek monetary damages; instead, it asked for a court order forcing the government to reduce above-average rates and raise lower payments (American Health Line, 11/18/1999). But last year, U.S. District Judge Donald Alsop, while calling the payment system "unfair," nevertheless ruled that Congress bears responsibility to make changes to the program, rather than federal courts ( Kaiser Daily Health Policy Report, 7/10/2000). The federation said it was "very disappointed" with the 8th Circuit's ruling, adding that it had not decided whether to appeal to the U.S. Supreme Court (Minneapolis Star Tribune, 12/14). The full opinion of the court is available online. Note: You will need Abode Acrobat Reader to view the opinion.