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Copyright 2000 Journal Sentinel Inc.  
Milwaukee Journal Sentinel

December 18, 2000 Monday FINAL EDITION


LENGTH: 831 words

HEADLINE: Budget raises Medicare HMO rate;
Lower premiums, expanded service remain unknown

BYLINE: JOE MANNING of the Journal Sentinel staff

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.

The national 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 2000.

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.

Wisconsin Attorney General James Doyle earlier this year filed a federal lawsuit seeking a change in

reimbursement patterns, but the suit has languished.

Medicare package

Highlights of the $35 billion Medicare package included in the congressional spending package:

-- Increases payments to managed care companies that offer Medicare coverage.

-- Increases payments to rural and big-city hospitals, teaching hospitals, nursing homes and hospices.

-- 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%.

-- Allows Medicare coverage for patients with Lou Gehrig's disease.

-- Provides biannual Pap smear screenings and pelvic exams.

-- Offers colon cancer screenings for all Medicare patients.

-- Allows coverage of the new digital mammograms.

-- Allows coverage of glaucoma screenings.

LOAD-DATE: December 18, 2000

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