Broader range of plans get option to join Medicare
Organizations can join new program
The Department of Health and Human Services has announced a regulation describing how health plans and organizations can become part of the new Medicare+Choice program.
Starting in January 1999, in addition to original fee-for-service Medicare and health maintenance organizations, a broader array of health plans will be able to join Medicare, including preferred provider organizations, provider sponsored organizations, private fee-for-service plans, and a Medical Savings Account demonstration project. These expanded health plan choices, known as Medicare+Choice, were created as part of the bipartisan Balanced Budget Act of 1997.
The regulation describes policies and standards that health plans and organizations must meet to participate in the Medicare+Choice program. The standards cover enrollment, benefits, access, beneficiary protections, quality assurance, provider protections, payments, premiums, and sanctions.
With publication of these standards, organizations may begin to apply to be certified as Medicare+Choice plans. Risk HMOs that already contract to enroll Medicare beneficiaries will be eligible to become Medicare +Choice plans on January 1, 1999.
While many Medicare beneficiaries will have a larger number of health plan options to choose from, no beneficiaries are required to change the way they currently receive care.
Access to Medicare+Choice options will depend on where the beneficiary lives and what types of plans are available in that community. Among the options are these:
1. Health maintenance organizations (HMOs). In HMOs, beneficiaries must obtain services from a designated network of doctors, hospitals, and other health care providers who have agreed to serve plan enrollees, usually with little or no out-of-pocket payments.
2. HMOs with a point of service (POS) option. When combined with a basic HMO package, the POS permits beneficiaries to selectively go out of network to receive services, with higher out-of-pocket payment requirements.
3. Preferred provider organizations (PPOs). Beneficiaries in PPOs obtain services from a network of health care providers that has been set up by the health plan. Unlike an HMO, beneficiaries can choose to go to providers who are not in the network, and the plan will pay a percentage of the costs while the beneficiary is responsible for the rest.
4. Provider-sponsored organizations (PSOs). PSOs are a relatively new form of managed care that work much like HMOs, except they are formed by a group of hospitals and doctors who directly take on the financial risk of providing comprehensive health benefits for Medicare beneficiaries.
5. Private fee-for-service plans (PFFS plans). The Medicare beneficiary elects a private indemnity type insurance plan. The insurance plan, rather than the Medicare program, decides how much to reimburse for services provided. Medicare pays the private plan a premium to cover traditional Medicare benefits. Providers are allowed to bill beyond what the plan pays (up to a limit), and the beneficiary is responsible for paying whatever the plan doesn't cover. The beneficiary also may be responsible for additional premiums.
6. Medical savings accounts (MSAs). Congress has authorized up to 390,000 Medicare beneficiaries to participate in a MSA demonstration. The beneficiary chooses a Medicare MSA Plan - a health insurance policy with a high deductible. Medicare pays the premium for the MSA plan and makes a deposit into the Medicare MSA that is established by the beneficiary. The beneficiary uses the money in the Medicare MSA to pay for services provided before the deductible is met and for other services not covered by the MSA plan.
Those options should expand the choices available to Medicare beneficiaries, particu larly in rural areas. Currently, 17% of Medicare beneficiaries are in managed care plans. It is expected that by 2005, approximately 30% of all Medicare beneficiaries will be enrolled in Medicare+Choice plans.
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