News in brief - April 10, 2000

Medicare HMOs' appeal is low cost, not benefits

Washington -- Medicare beneficiaries base their enrollment in managed care plans on cost rather than the extra benefits many plans offer, according to a new Dept. of Health and Human Services Office of Inspector General report.

Three out of four beneficiaries said the lower cost of an HMO led to their decision to participate in the Medicare+Choice program and to opt out of the traditional fee-for-service program. Half of beneficiaries said it was the most important reason.

As of September 1999, 17% of beneficiaries had chosen HMOs over the fee-for-service program. More than 50% of HMOs provide benefits not offered in the fee-for-service program, such as outpatient drug coverage, routine physicals, eye exams, ear exams and immunizations, the report notes.

Although cost was cited as the main reason for joining an HMO, 63% of enrollees said they examined the extra benefits and, once enrolled, valued prescription drug benefits, physicals and vision benefits most highly.

But beneficiaries' understanding of the extra benefits was uneven, said the report.

Washington -- The American Assn. of Health Plans has launched a new advertising campaign designed to shift attention away from managed care patient protection legislation to medical errors.

The television ad accuses lawmakers of focusing on health plan liability rather than reducing medical mistakes. "Lawsuits don't save lives -- doctors do," the ad states.

AAHP's effort follows an announcement by the Health Benefits Coalition, a group of insurers and businesses, that it launched a campaign attempting to derail support among House Republicans for managed care legislation passed by that chamber last fall.

The group's tactics include calls, letters and visits from employers of medium and large businesses to 28 Republicans who voted for a patients' rights bill drafted by Rep. John Dingell (D, Mich.), Charles Norwood, DDS (R, Ga.) and Greg Ganske, MD (R, Iowa). The bill is strongly favored by the AMA.

The coalition opposes the bill's liability provision, charging that lawsuits will likely proliferate and drive up the cost of health insurance, causing employers to drop or reduce benefits.