AAHP On Clinton Plan For Medicare HMOs

The American Association of Health Plans has criticized the Clintonadministration's proposed $34 billion cut in payments to Medicare health maintenance organizations (see page 15). AAHP president Karen Ignagni says that neither of the Clinton goals of modernizing Medicare and protecting beneficiaries can be met without adequate payment.

The proposed budget cuts target the 12% of Medicare beneficiaries who receive HMO care disproportionately; these seniors face a third of the cuts, she said. Also, the cuts will reduce the extra benefits provided by Medicare HMOs, raise out-of-pocket costs and ultimately mean fewer plan choices for seniors. The AAHP also challenges the view that seniors enrolled in health plans are younger and healthier. Studies cited by the Health Care Financing Administration showing favorable risk selection in the Medicare HMO program are based on out-of-date information and do not reflect important changes in the Medicare HMO program, it says.