Politics and Policy

The managed healthcare market has been expanding, and the trend is likely to continue as employers and government agencies struggle to rein in spiraling healthcare costs. An aging population and more costly healthcare technology will aggravate current spending trends; these developments, in turn, will spur further consolidation among health plans and providers, stymie efforts to reduce the growing number of uninsured in the United States and drive innovative efforts to make consumers more aware of treatment costs and quality options.

One reason so many insurers and health plans are sponsoring Medicare prescription drug plans (PDPs) is to attract traditional Medicare beneficiaries into the Medicare Advantage (MA) program. While there is considerable uncertainty about how stand-alone prescription drug plans (PDPs) will fare, insurers are willing to invest in the new drug coverage program to expand enrollment in local Medicare HMOs and PPOs, as well as new regional PPOs designed to attract seniors fearful of managed care.

Hundreds of private insurers are marketing Medicare Advantage plans and state-wide PPOs with unexpectedly low prices for expanded drug coverage to gain a bigger slice of the radically changing Medicare pie. While the public has been focused on deciphering new prescription drug coverage options through stand-alone prescription drug plans (PDPs), Medicare officials also note an "enormous rise in MA plans with Part D benefits," reports Medicare Senior Advisor Abby Block. More than 5 million seniors now belong to MA plans, and the number is growing monthly.

Elderly Americans will have to pay higher premiums for Medicare outpatient care next year than originally predicted to cover more doctors' office visits and increased use of hospital clinics. The rising expenditures also will boost payments to Medicare Advantage (MA) plans, further increasing overall program expenditures. While this trend may prompt more seniors to join MA plans, it also is fueling talk of cutting MA rates.

Competition Is heating up among insurers, pharmacy benefit managers (PBMs) and health plans as they ready major marketing campaigns to attract and enroll thousands of seniors in Part D Medicare prescription drug plans (PDPs). Insurers are offering hundreds of stand-alone and Medicare Advantage prescription drug plans (MA-PDs) in every region of the country, many promoting lower costs as a way to build market share.

A few months ago, Medicare officials were worried that insurers and health plans might be reluctant to offer new PPO and prescription drug coverage options created by Medicare reform legislation. Now it looks like the agency's real problem is to help Medicare beneficiaries choose wisely among a multitude of coverage options.

Rising Healthcare costs and growing uninsured populations are prompting state health officials to look for new ways to care for low-income and disabled populations.

Dr. Mark McClellan, administrator of the Centers for Medicare and Medicaid Services (CMS), plans to produce extensive information on how drugs and prescribing decisions affect health outcomes and costs by linking reimbursement data from Medicare prescription drug plans (PDPs) and Medicare Advantage (MA) plans with existing Medicare hospitalization and physician care databanks.

PROVIDING BETTER quality care at lower cost has long been the Holy Grail of healthcare, but reaching this goal has been more difficult and controversial than anticipated.

Officials at the Centers for Medicare and Medicaid Services (CMS) began smiling last month. They were watching the letters and applications roll in from MCOs--;a sign that seniors will be able to obtain care from a large number of local PPOs (preferred provider organizations) beginning next January.

IN HIS FIRST few days as Secretary of the Department of Health and Human Services (HHS), Mike Leavitt made waves by announcing plans to revise Medicaid and ensure drug safety.

President George W. Bush began his second term by launching a high-profile campaign to limit skyrocketing medical malpractice insurance premiums for physicians and hospitals.

In a surprise move, President George Bush named former Utah Governor Michael Leavitt as the next secretary of the Department of Health and Human Services.

Major initiatives to expand healthcare coverage to the uninsured or reform Medicaid are low on the priority list at the Bush White House.

Major initiatives to expand healthcare coverage to the uninsured or reform Medicaid are low on the priority list at the Bush White House.

Health and Human Services Secretary Tommy Thompson happily announced last month that Medicare beneficiaries will have more coverage choices in 2005.

The cost of family coverage under a PPO hit $10,000 this year, boosting concerns about the growing unaffordability of healthcare and future increases in the number of uninsured.

In late July, Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mark McClellan unveiled a massive proposed regulation for implementing the Medicare Modernization Act. The hundreds of pages of fine print (published in the Aug. 3, 2004, Federal Register) describes requirements for Medicare Advantage (MA) plans, subsidies for employers who continue retiree drug benefits, and rules to ensure that prescription drug plans (PDPs) provide adequate and appropriate medicines for seniors. There is considerable detail on PDP operations and benefit design, including copays and quality improvement programs, which apply to MA plans providing drug coverage to Medicare beneficiaries.

Recent legislation and regulations are encouraging payers and health plans to offer individuals more coverage options under the "consumer-directed health plan" label. Last year's Medicare Modernization Act (MMA) expanded tax breaks that make health savings accounts (HSAs) more attractive.

Healthcare access, Medicare rates will be hot issues in the election year debates

Democrats cry foul as analysts describe big jumps in rates for Medicare Advantage plans

This primary issue figures into upcoming elections

McClellan takes over at CMS amidst escalating battle over drug imports

MCOs enhance benefits, cut fees to attract more Medicare beneficiaries

Election year campaigning focuses attention on rising healthcare costs and the need for universal coverage