"Four Areas Of Concern" In GOP Medicare Reform

President Clinton will sign, albeit reluctantly, a second or third Medicare reform bill, and this will become a major issue in the 1996 elections along with deficit reduction, the balanced budget and the economy, predicts Gail Wilensky of Project Hope, who was formerly head of the US health Care Financing Administration.

Writing in the New England Journal of Medicine in December, Dr Wilensky says the second Medicare reform package to emerge from Congress will be fundamentally similar in scope and magnitude to the first. To the extent that such reforms become part of a comprehensive budget-reconciliation bill, Pres Clinton will find it increasingly difficult to veto the legislation, but medicaid may become a more serious stumbling block. While it is a high-risk strategy for the Republicans to press their reform package, theirs is not a bad medicare bill, she says, although there are four areas of concern, even for those such as herself who support it.

Her most serious worry concerns risk selection and the need to find adequate factors for adjusting risk beyond those now used by Medicare (ie age, sex and institutional status). Risk selection occurs when people considered to be at better or worse than average risk for health problems end up in particular health plans. The problem is the failure to adjust for this, and the question is whether Medicare can find ways to adjust its payments to plans according to distribution of the health risks among enrollees. If it cannot do this adequately, any choice will undo the risk-pooling fundamental to insurance plans. Locking people into their choices for a specified time will help mitigate problems raised by risk selection, she proposes.