New Legislation Would Permanently Maintain Health Care Options for Seniors.

Business Editors & Health/Medical Writers

WASHINGTON--(BUSINESS WIRE)--Sept. 24, 2002

Bipartisan legislation was recently introduced that will enable Medicare beneficiaries to maintain independence and delay or avoid premature nursing home placement. The Seniors Health and Independence Preservation Act of 2002 (SHIPA) will make the Social Health Maintenance Organization (Social HMO) a permanent program within Medicare+Choice.

Social HMOs extend beyond the traditional health maintenance organization model that may feature prescription drugs, vision and hearing services, and dental care to include care coordination and a variety of in-home personal care services. "We are very pleased that policymakers recognize that Medicare is endangered and may hinge on innovative programs made possible by this bill. Social HMOs have proven to be effective and have been endorsed by Congress for years as a continuing demonstration project. The time has come to provide permanence and peace of mind to seniors who presently benefit from the independence these services provide and others who can in the future," states Timothy Schwab, M.D., chief medical officer for SCAN(TM), the largest Social HMO in the country.

Included in the provisions of S. 2782 is a requirement to maintain Social HMO benefits in order to ensure that health plans continue to consistently provide the expanded benefit package currently offered to Medicare beneficiaries. SHIPA would also prohibit the Secretary of Health and Human Services, who oversees Social HMO plans, from modifying current benefit requirements without first notifying Congress, to protect those covered under such plans.

In addition, the bill creates the potential for possible expansion by calling for a study by the Medicare Payment Advisory Commission to evaluate program cost and effectiveness and it requires the Secretary of Health and Human Services to conduct a beneficiary and family member satisfaction survey among Social HMOs, standard Medicare+Choice plans, and Medicare fee-for-service programs. Cosponsors of the bill include Senators Dianne Feinstein (D-CA), Barbara Boxer (D-CA), John Ensign (R-NV), Harry Reid (D-NV), Hillary Rodham Clinton (D-NY), Charles Schumer (D-NY), Gordon Smith (R-OR), and Ron Wyden (D-OR).

According to a survey conducted by the Field Institute for the California Department of Health Services, 50 percent of women and 33 percent of men older than 65 are expected to spend at least some time in a nursing home, and more than half will spend more than a year. Another study funded by the Commonwealth Fund for the Urban Institute predicted out-of-pocket health care costs for the average senior will rise to 29.9 percent by 2025. Schwab commented, "As growth predictions for the aging population become a reality and state and local governments struggle to fund and maintain much needed community based services for people over 65, the Social HMO should be viewed as a viable solution for seniors, families and government entities." He cited a supportive SCAN commissioned study by The Lewin Group that was conducted to examine the value of the extended care and home-based services found with Social HMOs. The study found that SCAN members were 53 percent less likely to have a long nursing facility stay (60 days or longer) than those in the comparison group.

Public funding for home care is difficult to obtain and Medicare-funded home care is generally provided only for short, post acute care needs and has restrictive rules for eligibility. The shortage of people available to provide informal care and financial support for formal care further compounds the problem. Fortunately, states are beginning to look at innovative solutions to address the needs of the aging population encouraged by the 1999 Supreme Court case, Olmstead vs. L.C. This decision requires states to ensure that persons with disabilities be cared for in the community rather than in institutions and mandates states to respond by developing community care alternatives. For example, smaller programs like PACE (Program of All-inclusive Care for the Elderly) are currently obtaining permanent status in some parts of the country which gives promise for larger programs like Social HMOs that have a history of serving a larger segment of the senior population and potentially offer alternative long-term solutions for families and policymakers plagued with the rising cost of eldercare.

The Social HMO demonstration was first authorized in 1984 to test models for improving care for frail seniors that would increase access to supportive and social services and better integrate these expanded benefits with medical services. Currently, there are four Social HMO sites in the country that service more than 110,000 seniors. SCAN serves nearly 54,000 members in the four Southern California counties with additional sites in New York, Oregon and Nevada.