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    Tuesday, July 01, 2003

    The Backlash Begins: Private insurers are concerned about the new Medicare drug benefit:

    "But if Congress does not improve payments to H.M.O.'s in 2004 and 2005," she said, "more of them will withdraw from Medicare, and that instability will undermine confidence in the private sector as an alternative to traditional Medicare. It's very difficult to build a new program around a private sector that doesn't exist."

    Which is a problem now with Medicare HMO's - the insurance companies can't afford to care for Medicare patients at Medicare rates. (And neither can some doctors)

    There are other problems with the plan:

    Under the legislation that the Senate and House passed on Friday, Medicare would sign contracts with up to three preferred provider plans in each region of the country. Those plans would provide drug benefits along with a full range of medical services. The Bush administration has indicated it might designate 10 regions.

    ....The House and Senate bills would create an option for Medicare beneficiaries, encouraging them to enroll in preferred provider organizations like those that serve millions of working-age Americans. Contracts between Medicare and the plans would normally run for two years, too short a term to guarantee stable markets, the insurers said.

    "To establish a network of doctors and hospitals, to compile all the data needed for a bid, to hire a sales force and to advertise a new product to Medicare beneficiaries requires a huge investment," Ms. Lehnhard said. "Health plans would be hesitant to make that investment if they could be excluded from the Medicare program in two years. You don't want to put a new product on the market, entice people into it, tell them it's a great deal and then leave the market in two years."

    .....Insurers say they are also nervous about Washington's plan to award contracts for large multistate regions. A health plan that does business in Massachusetts and New Hampshire may not have a network of doctors and hospitals to care for Medicare patients in Maine or Vermont, the companies said. Moreover, they added, in a big state like New York or California, it will be difficult to establish a statewide network of providers.

    The Senate bill says, "There shall be at least 10 regions," and, "Each region must include at least one state," with all parts of a state assigned to the same region

    It just grows more and more complicated every day.

    posted by Sydney on 7/01/2003 08:00:00 AM 0 comments


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