Medicare HMOs to Raise Rates

* Re “Average HMO Medicare Rate Set to Double,” Sept. 16:

Ultimately, the problem is not how much the HMOs are reimbursed. The problem is that a fundamental of insurance is violated. Insurance works when there is a large insured population with varying risks. That’s true of medical, auto and other insurances. When one is thrown into an “assigned risk” auto policy, one’s insurance rates go up. Medicare insurance is like an assigned risk policy. The Medicare HMO’s bottom line is distorted by a large elderly population. The only workable solution is to have all ages use HMOs exclusively or, in essence, extend Medicare to all ages of the the entire population.

For the same reason, proposals of “subsidizing” HMO prescription benefits will fail. There will be no end of HMO increases as the subsidies are used to improve the bottom line. These subsidies will not be more successful than the present reimbursements, for the same reasons.

DOVE MENKES

Fullerton

*

It would be very helpful if in all your stories about HMOs you would tell what each HMO is paying its executives and stockholders, and then let the public decide if they really need more funding. You also could mention occasionally that these companies spent hundreds of millions of dollars to defeat health care for all of our citizens and are still spending to defeat any reasonable care, not to mention the millions they spend on advertising their wonderful services.

DOROTHY MELVILLE

San Juan Capistrano