February 2002
Managed Care Plan Out-of-Pocket Expenses in 2002
In summary, review of the out-of-pocket costs for California consumers enrolled in Medicare+Choice plans for 2002 shows that:
* Premiums are not necessarily an indicator of total out-of-pocket expenses.
* Expenditures are difficult to project at the time of plan selection due to the detail and plan complexity of the terms related to co-payments, deductibles, and coverage limits.
* Total out-of-pocket costs may exceed thousand of dollars over the course of the year.
Comment: California, the great testing-ground for innovative insurance products, has had more than ample experience with the Medicare+Choice options. The initial perception that these options were successful business models was due to the fact that initial enrollees were a healthy subset of the Medicare population. That subset is now older, less healthy, and more expensive. The magic trick proved to be another illusion. The reality is that these plans cannot provide more services, at a lower cost, while supporting expensive private bureaucracies.
To no one’s surprise, the plans are now in Washington, with hat in hand, pleading for more funds in the face of a Spartan budget. And Tom Scully, Bill Thomas and Nancy Johnson are attempting to change the rules to allow diversion of more funds to this industry, while penuriously posturing by failing to correct the slash in rates that will inflict serious damage to the traditional Medicare program.. They have it wrong. It is not the industry that needs support, but rather the patients. Most urgent is the need for bona fide prescription coverage. Let’s use our Medicare tax dollars for Medicare patients, not egregiously wasteful private bureaucrats.
Emanuel Gale, Emeritus Professor of Social Work and Gerontology, California State University, Sacramento, responds to the California Health Care Options Project:
The HCOP has been an interesting social policy exercise, in moving towards universal coverage.
My personal recommendations for HCOP are that:
1. In the current political climate, a national approach to universal coverage is unrealistic. States must therefore assume a leadership role.
2. The State of California should adopt a Constitutional Amendment that, “Health Care is a fundamental human right for all residents.”
3. There needs to be a priority for developing a “wellness” vs. the current “sickness” model.
4. The authors of the Incremental Reforms collaborate on a single proposal, to maximize the number of uninsured persons to be covered, within a three year time frame. This would be viewed as an interim first step, leading towards a single payer proposal.
5. The authors of the Single Payer proposals and the Employer Contribution proposals, collaborate on a single payer proposal to assure universal coverage, beginning at the end of the three year incremental period, and transitioning over the next five year period.
Without campaign finance reform, there has to be a prohibition of campaign contributions to an elected Health Commissioner, by the vested interests in health care. (e.g. Chuck Quackenbush, former Insurance Commissioner)
Achieving these objectives requires major investments in political and community organizing at the grass roots level, and the political will to foster radical changes in the current “sick” health care system.