Perspective               

Bush Promotes Medicare HMO Enrollment

The Bush administration is strengthening its campaign to promote and expand the Medicare HMO program. While the administration continues to promote Medicare HMOs, many experts maintain that the Medicare HMO system is severely flawed. Many HMOs have already left the Medicare market and many are seriously considering leaving the Medicare market.

According to data from the Kaiser Family Foundation, there were 168 fewer Medicare HMOs in 2001 than in 1998. Kaiser also reports that while eight Medicare HMOs make up more than 70 percent of Medicare HMO enrollment, most of them do not foresee staying in the program beyond two years without significant regulatory reform.

To keep HMOs in Medicare, President Bush has proposed to pay Medicare HMOs a 6.5 percent annual increase over the next several years. He says this proposal will benefit people with low incomes and minorities with Medicare since they are the most reliant on Medicare HMOs. However, millions of low income and minority elderly live in areas where no HMOs are available. And, many health policy researchers say that this plan does not guarantee that more HMOs will begin participating in the program.

Some researchers project that the extra $2.9 billion the Bush administration proposes giving HMOs over the next decade would help keep a lot of HMOs from leaving the Medicare program, but it would not attract a significant number of new ones.

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