Printer-friendly Version

FOR IMMEDIATE RELEASE: February 6, 2004

SCHUMER: NEW LAW COULD CREATE NEW HEALTH CARE OPTIONS FOR MANY NEW YORKERS

Schumer-championed provisions in Medicare bill that lower HMO costs are now bearing fruit; Prices are already down $1,140/year in Westchester and Rockland, $250/year in Buffalo

Senator urges other HMOs to take advantage of higher reimbursement rates and come to New York & offer better prices and options; Urges feds to approve lower premiums
for NY seniors

Schumer details number of New Yorkers in each county that could benefit from more options; In last three years, 9,865 have been dropped from HMOs in Capital Region; 2,077 in Central NY; 24,781 in Hudson Valley; 245 in North Country

A provision in the new Medicare bill to boost federal reimbursement rates for private healthcare providers could result in several new health care options and lower premiums for thousands of New York seniors, Senator Charles Schumer said today. Schumer praised HMOs that have announced plans to use the higher reimbursement rates to lower their prices for New Yorkers and urged more healthcare providers to do the same. Schumer also urged HMOs that left New York over the last five years because reimbursement rates were low to come back so New Yorkers could have more health care options from which to choose.

"This isn't just nickels and dimes, this is a quantum leap in the amount of money HMOs will get for serving upstate New Yorkers," Schumer said. "This wasn't easy to do, but after working together – Democrats and Republicans from across the country – we are finally seeing the results. When it comes to Medicare HMO money, the government has put up, so the HMOs have one less excuse for not showing up."

There are currently 430,000 New Yorkers across the state enrolled in the Medicare Plus Choice program. Unlike traditional medicare programs which pay medical practitioners on a fee-for-service basis, the Medicare + Choice plan – which will soon be known as Medicare Advantage – links HMOs and Medicare to extend coverage for services that the Medicare program does not usually cover. Since 1998, Medicare HMOs have been leaving New York in droves because reimbursement rates were not high enough for them to sustain doing business there.

The migration of many HMOs from New York State since 1998 has meant far fewer health care options for residents in nearly every region. As a result of the migration, thousands of residents throughout the state have been dropped at some point from their health care plans and forced to find another plan or exit the program altogether:• 9,865 people in the Capital Region have been dropped from HMOs since 2000;

• 2,077 people in Central New York have been dropped from HMOs since 2000;
• 24,781 people in the Hudson Valley have been dropped from HMOs since 2000;
• 245 people in the North Country have been dropped from HMOs since 2000.
[Please see attached report for county-by-county breakdowns.]

For years, Schumer has been trying to expand medical coverage in New York by increasing the amount the government pays HMOs – so they can both lower rates for seniors and still afford to do business in the state. The final version of the comprehensive Medicare Bill passed in November contained provisions Schumer championed that provide higher Medicare+Choice payments for HMOs serving upstate New York. In late September, 17 Senators - Democrats and Republicans from across the country - joined Schumer to urge that the final version of the Medicare Bill include these provisions, which are based on legislation he wrote with Republican Senator Rick Santorum of Pennsylvania, the third-ranking Republican in the Senate.

As a result of a provision that Schumer fought for in the Medicare bill, reimbursement rates the government will pay HMOs will now go up as much as 31.5% in 2004. This has led several HMOs -- including Independent Health in Western New York, Empire Blue Cross Blue Shield in Westchester and Rockland counties, and Blue Shield of Northeastern New York in the Capital Region – to announce plans to lower their premiums considerably

(please see attached chart for details).

Schumer today urged all HMOs to pass their savings along to New York seniors by coming to New York and offering more options or – for those already in New York – lowering their premiums. "The HMOs have said that they need higher reimbursements to come back to New York because they just can't afford to do business here. Well, we listened and got it done," Schumer said. "Now the HMOs that left New York should come back. The ones that stayed should lower their premiums. And ones that were never here in the first place should give us a fresh look."

Schumer explained that while some premium reductions and benefit changes have been announced, these changes are still in the process of getting final approval at the Centers for Medicare and Medicaid Services. Later this month when approvals are final, several more health plans across the state are expected to announce reductions in their rates and improvements to the health coverage they provide which were made possible by the passage of the provisions Schumer championed.

Attached is a comprehensive report detailing how many HMOs have left New York in recent years, how many New Yorkers were subsequently dropped from plans, and the new benefits and reduced premiums that have already been announced in New York as a result of the new law.

####