A new type of health plan has officially been authorized for the country's 30 million Medicare beneficiaries. It promises good medical care at lower cost -- and most will find that it fulfills its promise. Some patients will be disappointed, perhaps because they didn't realize what the new plan was all about. In a few cases, patients may feel it would be a mistake to join.
A few experimental plans have been operating for several years. Now they are free to spread across the country. Here's what you need to know:
At issue is the Medicare health maintenance organization (HMO). About 200,000 Medicare patients already belong to regular HMOs. For most, it's like going to any other doctor. They belong to the HMO group, yet can readily go elsewhere for insured medical treatment if they prefer.
A Medicare HMO is something different. If you sign up, you agree that the HMO will take care of all of your medical needs, including the service of specialists. All treatment received through the HMO is covered by Medicare. So is any outside treatment approved in advance by the HMO (in cases where the HMO lacks the proper specialist on its own staff), or non-HMO emergency treatment when you're away from home.
But if you decide you want to see another doctor, Medicare won't pay. You are locked into your HMO for as long as you choose to be a member.
Why sign up? Because a Medicare HMO can save you money and perhaps provide better health care than you had before.
Normally, Medicare doesn't cover all the medical bills. You pay a deductible and a portion of each bill that is above the Medicare limit. Many older people find these costs to be substantial (averaging $2,000 a year). To protect themselves, they buy "Medigap" health-insurance policies to cover expenses not included in Medicare.
With a Medicare HMO, you don't need Medigap insurance. The HMO covers everything, with no deductible. There is usually a monthly membership fee ranging from $5 to $45 (the average: $15 to $20 a month), but there are few or no additional out-of-pocket expenses. One Medicare HMO charges no fees. An HMO may also provide services not normally covered by Medicare, such as eyeglasses, prescription drugs and routine physical exams. So the Medicare HMO offers more for your money.
There are two key things to understand:
* Once you've signed up, you cannot go back to your former doctor -- or to a specialist of your choice -- and expect Medicare to pay the bill. It won't, unless the doctor belongs to the HMO group or your visit was approved by your HMO. If you are out of town and visit a doctor, the HMO is within its rights to refuse payment, unless you can show that the visit was a true emergency. You must be prepared to use the HMO exclusively, even for medical specialists.
* If you want to quit the HMO, you cannot do so right away. You have to give notice and then keep on visiting the HMO until Medicare officially takes you off its rolls. On paper, disenrollment is supposed to take about a month, but it's often two months or longer. If you go to another doctor before the paperwork has been completed, Medicare won't pay. If you wait for a medical emergency, then decide you want different treatment than the HMO is prepared to give, you're out of luck.
A report soon to be released by the General Accounting Office will criticize Medicare's paperwork delays. Even after you officially leave an HMO, you may find Medicare erroneously refuses to pay a legitimate bill, just because its records are messed up.
You should investigate carefully the types of doctors and specialists on the HMO staff. If you're not committed to this form of care, don't sign up.
Almost all of the experimental Medicare HMOs have excellent records and satisfied customers. But in South Florida, problems have arisen that bear watching as this type of health plan expands across the country.
Instances have arisen of HMOs dragging their heels on approving specialist care outside the HMO group. In one well-publicized case, the HMO dickered with the family while the patient was dying. It finally agreed to transfer him to another hospital when the family agreed to pay extra costs. But by then it was too late.
Patients have the right to appeal to Medicare if they object to an HMO's decision not to pay for certain treatments. But for the elderly sick, a lengthy appeal may not have much practical value. It's important to learn from others how well the HMO responds to expensive emergencies for older patients, before deciding to enroll.