HCFA: Medicare+Choice enrollment is dropping >
Lobbying to raise rates increases
The pipeline of new Medicare+Choice members "is essentially drying up," a Health Care Financing Administration (HCFA) official told a recent meeting of the Washington Health Care Forum.
"Two years ago, the M+C program seemed pretty vibrant," noted Robert Berenson, MD, director of HCFA’s Center for Health Plans and Providers. However, since then, there has been a dramatic reduction in net enrollment growth.
The total number of beneficiaries in Medicare+ Choice actually declined by 126,000 between December 1999 and April 2000. Most of the decline occurred in January when health plan withdrawals from the Medicare+Choice program were announced. About 320,000 enrollees were affected by the January withdrawals, according to HCFA data. Of those, about 80,000 did not have the option to enroll in another Medicare+ Choice plan.
After the January drop, Medicare+Choice projects a net increase of about 10,000 beneficiaries each month this year, according to Berenson. That would bring total enrollment at the end of this year to where it was at the end of 1999. In previous years, Medicare+Choice enrollment averaged 40,000 new enrollees each month in 1999 and about 90,000 enrollees per month in 1998.
About 16% of Medicare beneficiaries are now enrolled in risk plans, compared with 4% in 1993.
That has led to increased lobbying by health plans and state governments to raise Medicare+ Choice rates to attract more HMOs into the program. However, Capitol Hill watchers like Ira Loss of the consulting firm Washington Analysis in Washington, DC, conclude that lawmakers are not in a mood to hike Medicare risk reimbursement this year.
On a separate track, Wisconsin and Minnesota have sued the federal government, claiming the reimbursement rates paid Medicare-risk HMOs are so low they are unconstitutional. They claim the low reimbursement rates effectively deny their senior citizens access to local providers who refuse to participate in the program, says Jim Haney, a spokesman for Wisconsin attorney general’s office. "Our intention is not to take away anyone’s benefit," he says. "We want equal benefits for seniors in all states."
In 1999, 43 Medicare-risk HMOs left the program nationally, while 52 reduced their service areas. Many of the remaining HMOs since have raised their premiums or cut benefits. Besides Minnesota and Wisconsin, states especially affected by these HMO dropouts include Arkansas, Missouri, Montana, North Dakota, South Dakota, South Carolina, Utah, Vermont, and Wyoming.
Like other managed care plans, Medicare HMOs make money when they negotiate contracts with providers that cost them less than the HMO is paid. How much Medicare pays these HMOs varies widely depending on their location.
Nationally, the average Medicare+Choice reimbursement per member per month (PMPM) nationally was $488.45 in 1999. But specific payments ranged from $676.64 PMPM in Broward County, FL, to $394.42 for Dakota County, MN.
In Broward County, a member of a Medicare HMO pays no annual premium, no fee for doctor visits, prescription drugs, outpatient mental-health treatments, or emergency medical services.
However, a senior in Dakota County must pay an average annual premium of $1,137 plus additional fees, including a $10 co-pay for a doctor’s visit, out-of-pocket expenses for almost all prescription drugs, $15 to $30 for each mental health session, and $30 for emergency room treatment.
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