Copyright 2000 Journal Sentinel Inc.
December 18, 2000 Monday FINAL EDITION
SECTION: BUSINESS; Pg. 01D
LENGTH: 831 words
Budget raises Medicare HMO rate;
Lower premiums, expanded service remain
BYLINE: JOE MANNING of the Journal Sentinel
Medicare HMOs in Wisconsin urban areas
will receive a 16% monthly rate increase next year as the result of
congressional action late Friday.
The Medicare HMO rate increases are
part of the omnibus budget bill that was passed after negotiations between the
congressional leadership and the Clinton administration.
But while one
health maintenance organization indicated that the increase would be helpful, it
was unclear whether it would be enough to help lower rates or persuade insurers
to offer the HMOs in parts of Wisconsin where they are no longer available.
"It is encouraging that the rates increased -- and we are pleased by
efforts of the Wisconsin delegation - - but it is not clear whether this is
going to be enough money to really address the disparity that exists between
Wisconsin and states like Florida," said Bill Zaferos, spokesman for Blue Cross
& Blue Shield United of Wisconsin. "We'll have to take a look at the
numbers," Zaferos said.
U.S. Rep Tom Barrett (D-Wis.), who worked on the
bill in the House Commerce Committee, said the bill addresses "the Medicare
disparity issue that has forced Wisconsin seniors to pay more for Medicare HMO
services than seniors in other states."
In October, Blue Cross told
Medicare HMO members that it was increasing monthly premiums 183%, from
$30 a month to $85 next year. At the same time
PrimeCare Gold, a division of UnitedHealthcare of Wisconsin, said it was
increasing premiums by 117%, from $30 a month to
$65 in 2001. Blue Cross has 14,000 Medicare HMO members in the
Milwaukee area and PrimeCare Gold has 15,000.
The growth of Medicare
HMOs in Wisconsin has been slow. And in the past, some companies have dropped
the coverage in most counties, saying that reimbursements did not cover the cost
of care for seniors.
The bill passed Friday will increase the monthly
amount paid a Medicare HMO from $452.31 to
$525 in urban areas such as Milwaukee. In less populated areas
such as Kenosha County, the monthly rate of $463 will increase
to $475 a month, about a 2.6% increase.
average is $515 a month, and some counties in Florida approach
$800 a month. The rate in New York City is
$742 a month.
The state's monthly average is
$386 per member while the national average is
$515, according to Thomas Hefty, president of Blue Cross, who
has been urging the Congress to increase Medicare funding before the end of
In a letter last month to the Wisconsin congressional delegation,
Hefty said the cost of health care in Wisconsin was "higher than than the
current (Medicare) formula recognizes."
Steve Pinzer, spokesman for the
West-Allis based Covenant Healthcare Inc. hospital system, said the rate
increase would be welcomed because the reimbursements paid to hospitals and
clinics have not been enough for a long time.
Pinzer did not know how
far the bump up would go toward solving the overall problem of Medicare
underfunding in the state.
The Wisconsin Health and Hospital Association
estimated the amount of money lost by hospitals treating Medicare patients last
year was $338 million. Twenty percent of the state's hospitals
lost money last year because of federal underfunding, according to the
association, which represents 132 hospitals.
Medicare underfunding is
considered a major contributor to high health care costs in southeastern
Wisconsin. Hospitals make up shortfalls by shifting costs to the private sector,
which forces businesses to pay higher health insurance premiums.
Wisconsin politicians, aware of the substantial differences in the
amount of Medicare money spent on seniors depending on where they live, have
long sought to bring about Medicare equalization through congressional action.
But legislators have encountered strong opposition from larger states
not wanting their higher reimbursements reduced.
General James Doyle earlier this year filed a federal lawsuit seeking a change
reimbursement patterns, but the suit has languished.
Highlights of the $35 billion Medicare package
included in the congressional spending package:
-- Increases payments to
managed care companies that offer Medicare coverage.
payments to rural and big-city hospitals, teaching hospitals, nursing homes and
-- Expands several Medicaid provisions, including the State
Children's Health Insurance Program, which is for uninsured children whose
families are low-income but make too much money to qualify for Medicaid. It also
expands Medicaid coverage for Welfare to Work participants.
-- Lowers in
phases the outpatient co-payment from 60% to 40%.
Medicare coverage for patients with Lou Gehrig's disease.
-- Provides biannual Pap smear screenings and pelvic
-- Offers colon cancer screenings for all Medicare patients.
-- Allows coverage of the new digital mammograms.
coverage of glaucoma screenings.