August 27, 2004

August 27, 2004 | WebMemo on Health Care

Bitter Pills #14: Will Medicare Discourage Coverage Options?

Proponents of last year's Medicare overhaul trumpeted the bill's promise to let seniors choose from a variety of health coverage options beginning in 2006. But what happens if the regulations discourage insurance companies from playing ball?

That seems to be happening already. "A major obstacle to the success of the new Medicare law has emerged in recent weeks," The New York Times reported Aug. 22. "Private insurers have told the Bush administration that they will not expand their role if they have to serve large multistate regions, as the White House wants."

Insurer reluctance to cobble together regional health plans comes as no surprise to Heritage Foundation health policy analysts. In a Heritage lecture last October, health insurance expert Robert Laszewski predicted this very problem would arise. "Most health plans operate in only one state, or two or three states, and rarely in every town and village in those areas," he noted long before the complex Medicare bill became law last October.

Read more of Laszewski's lecture here: http://www.heritage.org/Research/HealthCare/HL801.cfm.

For more information or to receive an e-mail version of "Bitter Pills," contact chris.kennedy@heritage.org or call Heritage Media Services at (202) 675-1761.

"Bitter Pills" is an occasional, but regular, feature from The Heritage Foundation on how the 2003 Medicare drug law is full of sickening "surprises" that have serious consequences for seniors and taxpayers. Of course, The Heritage Foundation isn't surprised at all. We diagnosed the problems long ago in ourMedicare Maladies series. Both Medicare Maladies and Bitter Pills are available on heritage.org (if you can stomach them).

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