Shalala Urges Increased Flexibility for Medicare

WASHINGTON — Medicare should be updated to give beneficiaries more choices among health plans and an easier time moving in and out of health maintenance organizations, Health and Human Services Secretary Donna Shalala said Wednesday in a preview of Clinton administration proposals.

The plans could have special impact in California, the biggest market for managed care for senior citizens. About 25% of the state’s Medicare beneficiaries are in HMOs, compared to fewer than 10% nationwide.

The administration’s proposal, to be contained in its new budget plan, would make it easier for doctors and hospitals to compete with HMOs by forming their own health networks for Medicare beneficiaries.

Another particularly significant measure would make it easier for people to move between HMOs and traditional fee-for-service medicine, which allows unrestricted choices of doctors and hospitals.

HMO dropouts sometimes have trouble getting back their Medi-gap coverage--supplemental private insurance that pays the bills only partly covered by Medicare. The administration plan would assure that beneficiaries can return to their Medi-gap coverage, even with serious health problems.

The administration also wants to establish an annual enrollment information period when beneficiaries would get detailed information and counseling to compare different health plans. HMOs could continue the current practice of signing up patients year-round but the new program would focus special attention on helping people get the best deal in picking or discarding a health plan.

If Congress approves the plans, Medicare would be updated, reflecting the new world of HMOs, high-technology medicine and preventive care that is far removed from Medicare’s creation a generation ago, according to administration officials.

Consumer advocates agree.

“The more intense the competition, the better the benefits package,” said Aileen Harper, head of direct service programs for the Center for Health Care Rights in Los Angeles, which provides counseling to Medicare beneficiaries. The proposal to make it easier to leave an HMO and get back Medi-gap coverage is “obviously great for consumers,” she said.

In Southern California, there is a lot of shopping, with many consumers going from one HMO to another, she noted. The benefits package is more extensive than the rest of the country, because California has strong HMOs fighting vigorously for business. Many plans offer the basic Medicare coverage, and add to that such extras as prescription drugs, dental care and vision care and, sometimes, health club memberships.