JUNE 15, 1998 VOLUME 5, NUMBER 50
Thirty-eight million individuals now receive their medical care through the federal Medicare program. The Health Care Financing Administration (HCFA), which manages the Medicare program, is busily preparing a new, $40 million version of its annual handbook for Medicare recipients, which will shortly be available to participants, providers and advocates. This year, however, because of the new Medicare options created by Congress in its last session, there will be over 500 versions of the Medicare handbook, and officials say they expect more confusion on the part of participants after they have read the new explanations.
HCFA has tried out early versions of the handbook on groups of Medicare beneficiaries, and reports that even well-educated recipients have trouble understanding the choices. One sample explanation:
"If you had a supplemental policy and dropped it to enroll in a Medicare managed care plan, or Medicare Select policy for the first time, and you choose to disenroll from the Medicare health plan or Medicare Select policy within 12 months of enrolling, then you can go back to the Medigap policy you had before joining the Medicare health plan, if it is still offered, or purchase Medigap policies A, B, C or F. This protection is available ding the 63 days after leaving the health plan."
The reason for the confusion (and the confusing language) is simple: there are five new plan options which must be explained to participants. Because several of those options rely on private insurance plans, not all of them will be available in every area of the country. In addition to traditional fee-for-service Medicare, participants will now be able to choose from among:
- Medicare HMOs. This option has been available for several years, and in fact six million Medicare beneficiaries are already enrolled in HMOs. Congress predicts that number will grow to seventeen million in the next ten years.
- HMO with "Point-of-Service" option. Patients may enroll in a Medicare HMO, but retain the right to go outside the plan's list of physicians and hospitals if and when they are willing to pay extra.
- Preferred Provider Organizations (PPOs). Beneficiaries may visit any physician or hospital, but will pay less when they use the services of participating providers.
- Provider-Sponsored Organization. Physician groups and hospitals may join together to offer a combined plan to participants, who will receive most of their services from the participating providers.
- Private Fee-for-Service. Essentially private insurance, with Medicare providing a portion of the premium coverage. Participants would be permitted to use any provider, but may pay higher premiums for the plan because the government does not limit fees or services.
- Medical Savings Accounts. Participants purchase insurance to cover only catastrophic illnesses, and Medicare pays the premium, then deposits the rest of the participants' benefit into a savings account. If routine medical costs exceed the funds in savings, participants will have to pay from their own pockets.
While the variety of plans is intended to lead to more consumer choice, administration officials warn that it will also lead to more confusion. HCFA officials estimate that they will need over 2,000 workers just to answer telephones during the busiest times of day after the distribution of the Medicare handbook.
Congressional staffers also predict that their offices will be flooded with calls from confused constituents. They may be uniquely qualified to answer callers' questions--after all, Congress created the new choices last year, and will now find itself in the position of explaining them.