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WASHINGTON – Responding to concerns about the growing exodus of HMOs from Medicare, Senator Joe Lieberman today called for an immediate legislative solution to safeguard the health coverage of millions of seniors in Connecticut and around the country.
The problem stems from legislation Congress passed in 1997 to balance the budget. The Medicare provisions in that bill were expected to save $100 billion over five years, but recent calculations put the actual cuts in Medicare payments at more than $200 billion. As a result, community hospitals, teaching hospitals, rural hospitals, home health agencies, nursing facilities, and Medicare HMOs have been forced to cut back or drop services.
To prevent Medicare beneficiaries from losing coverage and access to care, Lieberman joined with 68 other senators in sending a letter to leaders of the Senate Finance Committee calling for action this year.
"When Medicare fails to pay its share, it threatens health care for all patients," the senators wrote in a letter to Senate Finance Chairman William Roth (R-DE) and Ranking Democrat Daniel Patrick Moynihan (D-NY). "Reduced Medicare payments are contributing to decisions by many providers and insurers that threaten Medicare beneficiaries' access to care, including staff layoffs, reductions in services, or even outright facility closures or decisions to withdraw from the Medicare program. As you well know, entire communities suffer when such actions take place."
Last month in Connecticut, four leading insurance providers – Aetna, Anthem Blue Cross, CIGNA, and Foundation Health – announced plans to withdraw from the state's Medicare HMO market, while Physicians Health Services said it will pull coverage in Middlesex and Litchfield counties. The withdrawals will force more than half of the state's seniors in Medicare HMOs, an estimated 52,000 people, to find other health insurance next year.
Connecticut's dire outlook mirrors the national picture, where Medicare shortfalls threaten the health coverage of more than 711,000 seniors next year. The crisis is a result of greater-than-expected savings wrought by the Balanced Budget Act, the senators wrote.
"The Balanced Budget Act had many benefits for the economy and the country," the senators wrote. "But the savings extracted from Medicare providers have gone much further than any of us expected when we voted for the legislation. A further installment of relief is clearly needed this year, and Congress can clearly afford to provide it."
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