Gore to unveil report, hitting Medicare HMOs

By Aaron Zitner, Globe Staff, 09/22/99

ASHINGTON - Aiming to boost President Clinton's proposal to overhaul Medicare and give seniors a new drug benefit, Vice President Al Gore will unveil a report today that says HMOs are falling short in serving the nation's Medicare beneficiaries.

More than 6 million seniors, including 228,000 in Massachusetts, have switched from the federal Medicare insurance program to private health maintenance organizations since the option became available in 1997. But recently, many HMOs have cut benefits and withdrawn from some markets, saying that the government does not pay them enough.

Gore will assert at a conference of the American Medical Association today that these cutbacks, outlined in the new government report, show that the president's broad overhaul proposal is necessary. ''Many of America's working families that depend on Medicare cannot depend on their HMOs to deliver the affordable, critical benefits that enticed them to choose an HMO in the first place,'' Gore will say, according to a draft version of his remarks. ''It underscores the need to pass comprehensive Medicare reforms'' that include a prescription drug benefit.

Managed care companies say they can control costs better than Medicare can. However, the American Association of Health Plans, an HMO lobbying group, says that the government has built a payment system that makes it unprofitable to offer insurance in many areas of the country. ''We always said we could do better'' than Medicare ''for less. We never said we could work miracles,'' said Susan Pisano, spokeswoman for the HMO group.

The association wants Congress to preserve the existing Medicare HMO system but also boost the payments to insurers, as well as cancel some cutbacks scheduled to take effect next year.

Gore will argue today for Clinton's broader reform. Currently, the government uses a complicated formula to decide how much to pay plans to provide insurance. Clinton would require the plans to compete with each other to offer service at a lower cost than Medicare does. Some of the difference in cost would benefit the government, but most would be passed to seniors in the form of lower premiums.

In addition, Clinton has proposed giving seniors the option to buy partial coverage for prescription drugs through Medicare.

Gore will cite a new report from the Department of Health and Human Services, which is based on what HMOs have told the government about their business plans. The report finds that:

Medicare HMOs are cutting back on the prescription drug benefits they offer, or are scrapping the benefit altogether. More plans are putting tight limits on the amounts they will reimburse seniors. More than 1.2 million seniors are required to make no copayment on a drug benefit this year, but all seniors will have to make some kind of copayment next year.

More seniors are paying high premiums for Medicare HMOs.

Prescription benefits are especially limited in rural areas.

''This report underscores the urgent need for Congress to enact a strong prescription drug benefit for all Medicare patients,'' said Senator Edward Kennedy of Massachusetts. ''Too many senior citizens lack any coverage for prescription drugs, and few senior citizens have coverage that is affordable, adequate, and dependable.''