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Seniors ponder options for Medicare coverage


WASHINGTON -- Hedwig Groetsch is cautiously making her way over bewildering new health-care terrain, tantalized by a promise of lower medical bills but reluctant to take the big step necessary to get those savings.

The 78-year-old Catonsville widow is trying to decide whether to jump onto the managed-care bandwagon. She would have to give up her freedom to visit any doctor she chooses as often as she likes. In return, she would enjoy broader coverage than she now gets in traditional Medicare -- and pay less for it.

"I really would like to change, but I'm skeptical," she says.

Her quandary is one that many of the 37 million Medicare recipients could have to face once Congress reshapes the program that pays nearly half their medical bills but costs taxpayers dearly -- about $161 billion this year alone.

As they reduce projected Medicare spending by $270 billion -- nearly 16 percent -- over seven years, Republicans promise that seniors will not be forced to give up the health-care system they are most familiar with -- known as fee-for-service.

They insist that retirees who forsake tradition to embrace managed care will be rewarded with more money in their pockets. But there are trade-offs.

In managed care, which takes a number of forms, including health maintenance organizations, Medicare recipients like Mrs. Groetsch may use only doctors approved by the plan. And a primary-care physician must authorize all visits to other doctors and hospitals and all medical procedures. Otherwise, the plan won't pay the bill.

Most managed-care firms are for-profit. They collect a fee from the government for each Medicare enrollee. If the cost of caring for the person exceeds that fee, the plan takes a financial hit. If the cost is less, the company profits, up to a limit, and puts the rest of the savings into benefits.

Medicare recipients in managed care must still pay the government a premium for physician services, which is $46.10 ++ this year. Some managed care companies also charge an added premium.

In promoting managed care, Republicans are following the lead of American employers. Convinced that they will save themselves money, companies that pay employees' health-care costs have channeled nearly two-thirds of their workers into managed care.

Maryland is behind

Medicare lags far behind, with only 10 percent of its recipients in managed care. But retirees are beginning to discover the potential savings. Medicare enrollment in managed care is growing by 70,000 to 75,000 people a month, according to the Health Care Financing Administration, which runs Medicare.

Maryland is behind the curve, with only 2 percent of Medicare recipients enrolled in managed care.

For congressional Republicans, the stakes are high. The savings they anticipate from moving many of the elderly into managed care are crucial to redeeming the party's pledge to balance the budget by 2002 -- and, Democrats say, to give a $245 billion tax cut to wealthier Americans.

Doctors, hospitals and other health-care providers also have a big stake. Should the drive toward greater use of managed care falter -- or should anticipated savings fall short -- payments to providers could be severely cut. Republicans say they would make up the difference by reducing payments to providers. And that could affect recipients, because some doctors may then refuse to treat Medicare patients.

At the same time, managed care could succeed all too well, in the view of some, by reducing use of doctors and hospitals in what some say amounts to rationing.

Chesapeake Health Plan of Baltimore is one of seven companies authorized by the Health Care Financing Administration to offer managed care to Medicare recipients in Maryland. Like other approved firms, Chesapeake must accept all applicants regardless of their health status. There are two exceptions: people who have had a kidney transplant within 36 months and those on kidney dialysis.

Chesapeake recently invited the perplexed Mrs. Groetsch to a recruiting meeting in Woodlawn. The pitch was straightforward, offering greater coverage than she gets now and promising to cut her expenses.

The savings -- from dropping her supplemental insurance and lower out-of-pocket payments for services -- would be hundreds of dollars a year when she is healthy and thousands more in case of an illness that requires long hospitalization.

"It sounds too good to be true," she said, still wary after the hourlong session. But she was tempted enough to explore the offer -- and to decide to attend a second meeting today.

Quick decision to join

It didn't take her friend Tina Ringenary of Ellicott City long to decide. Soon after the meeting, Mrs. Ringenary signed up, expecting to save thousands of dollars.

The government will pay Chesapeake $550.13 a month for Mrs. Ringenary and the same for her husband, Francis, and won't charge additional premiums.

Like many Medicare recipients, the Ringenarys bought supplemental insurance to cover expenses the government plan doesn't cover. Their Blue Cross-Blue Shield policies cost about $1,800 a year -- and they still have some medical bills to pay out of their own pockets.

Mr. Ringenary is undergoing treatment for bladder cancer, diagnosed early this year. They have already paid $1,000 in costs that Medicare and Blue Cross don't cover. "And," she added, "the bills are still coming in."

Told by Chesapeake that she and her husband are "guaranteed acceptance regardless of your age or health status," she said she wouldn't have the out-of-pocket and insurance expenses she now has.

"If it lives up to everything they say about it, it's a fantastic thing," she said of the Chesapeake plan. "I figure, what do I have to lose if I go with it for a year or two? The worst that can happen is that I'll join back up with Blue Cross."

Joseph and Agnes Clay made a similar decision three years ago. The Long Island couple dropped supplemental insurance that was costing them $2,400 a year. Mrs. Clay joined an HMO, while Mr. Clay remained in the traditional plan, counting on his veteran's benefits to cover costs not picked up by Medicare.

Mrs. Clay, 77, soured on her HMO. Her primary care physician would not authorize a visit to a dermatologist so that Mrs. Clay, fearing skin cancer, could have a lesion on her forehead checked.

"She just didn't want me to go," Mrs. Clay concluded. "But she never told me. She just wouldn't make the appointment."

So she switched HMOs and is happy now. There is ample evidence that she's not alone.

Geraldine Dallek fields many complaints about HMOs at the Center for Health Care Rights in Los Angeles, a nonprofit consumer protection organization. In a region where one-third of Medicare recipients are in managed care, she says they generally are happy.

"We wouldn't see this growth if these organizations were so awful," she said.

June Gibbs Brown, chief investigator for the Department of Health and Human Services, said that surveys "have demonstrated an overall satisfaction for services received in Medicare HMOs."

Surveys show that 90 percent of elderly Americans are satisfied with their health care -- whether managed care or fee-for-service. But they also show that the nine out of 10 Medicare recipients who haven't joined managed-care plans are highly skeptical of them.

Fee-for-service complaints

A survey of 3,000 under-65 adults done for the Commonwealth Fund, a New York foundation that describes its mission as improving quality of life for Americans, showed more dissatisfaction with managed care than with fee-for-service.

Some dissatisfaction stems from concerns that economic incentives may affect the quality of health care.

In fee-for-service, "The more care given and procedures done, the more money made," Ms. Dallek says. But with managed care, she adds, the incentive is to save money by doing fewer medical procedures.

That fuels the suspicion of many -- not solely the elderly -- that managed care companies will make decisions based on economic concerns and profits rather than the health needs of their members.

Nancy Starr, vice president of Chesapeake Health Plan, heatedly disputes that notion.

"We do not deny care," she said. "We would not want to deny care because we take full risk for everything. When you deny care, you end up making people sicker. Then you really have a serious risk on your hands."

A major stumbling block to expansion of managed care for Medicare recipients appears to be attachment to doctors. Many people -- elderly or not -- are reluctant to accept a managed care plan if it means they must change doctors.

Surveys show that freedom to select a doctor is vital to the elderly in deciding whether to move to managed care, says Jonathan Weiner, professor of health policy and management at the John Hopkins School of Hygiene and Public Health.

"The greatest majority of us have limited choice" over health care, he says. "Medicare is the last holdout."

"I've been with the same doctor for 26 years," says Hugh Boyd, 74, of Woodlawn. "If I'm sick, he will even come to my house. I'll stick with my doctor."

GOP mindful of seniors

Resistance to change among the elderly was on the minds of GOP leaders when they designed their plan.

"We assumed that the hardest-to-communicate-with folks were 75 years old and over," House Speaker Newt Gingrich told reporters Friday. "That they would be the most frightened and the most risk-averse and the least likely to get thorough knowledge about the situation."

He added, as if speaking to the elderly: "If you don't want to leave Medicare in its current form, don't worry. It lets the person who is the most risk-averse relax."

To Arabella Chiles, 75, of Catonsville, that's good news. She describes herself as "110 percent Republican," but when it comes to considering a shift to managed care, she has a terse answer: "No way."

Her judgment is based on her son's experience. An HMO member through his job, he rushed his own son to the hospital a couple years ago after a fall. The result: stitches in the mouth.

Later, Ms. Chiles' son learned that he would have to foot the entire hospital bill. The HMO wouldn't pay because it hadn't authorized the visit in advance. He couldn't get in touch with the HMO," she says.

For Mrs. Clay, who lives on Long Island and belongs to an HMO, changing doctors wasn't difficult. Most of her doctors had retired and, besides, she says: "How bad can an HMO doctor be? All doctors are board-certified."

But for Hedwig Groetsch the ability to retain her current doctors is important, even though she feels a financial incentive to shift to managed care.

She vividly remembers her late husband's 3 1/2 -year fatal illness. She paid more than $10,000 in bills that Medicare and his supplemental insurance policy would not cover. And that was in the early 1980s.

While her internist belongs to the Chesapeake network of physicians, two specialists whom she consults regularly do not. And she is reluctant to give them up.

"I hate to go to the doctor anyway, but I hate to change doctors" even more, Mrs. Groetsch said.

As she and millions of older Americans are finding out, there are no easy answers or clear-cut choices.

Managed-care plans in Maryland

Seven companies in Maryland offer managed-care plans to Medicare enrollees, according to the Health Care Financing Administration. Service areas vary; only one is authorized to market plans statewide.

Name: Kaiser Foundation of Mid-Atlantic

Location: Rockville

Service area: Baltimore City, Anne Arundel, Baltimore, Carroll, Harford, Montgomery, and Prince George's counties and part of Howard County.

Name: Optimum Choice

Location: Rockville

Service area: Statewide

Name: U.S.Healthcare

Location: Blue Bell, Pa.

Service area: Baltimore City and Anne Arundel, Baltimore, Carroll, Cecil, Frederick, Harford, Howard, Montgomery and Prince George's counties.

Name: Chesapeake Health Plan

Location: Baltimore

Service area: Baltimore City and Anne Arundel, Baltimore, Carroll, Cecil, Harford, Howard and Prince George's counties.

Healthcare Corp. of the MidAtlantic. (CareFirst)

Location: Baltimore

Service area: Baltimore City and Anne Arundel, Baltimore, Carroll, Harford and Howard counties.

Name: Health Plus

Location: Greenbelt

Service area: Montgomery and Prince Georges counties.

Name: Humana Health Plan

Location: Washington, D.C.

Service area: Charles, Howard, Montgomery and Prince George's counties.

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