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Sudden change of plans for Medicare handbook

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In an abrupt change of plans, Clinton administration officials said Friday that they would restrict the initial distribution of a new consumer guide on the Medicare program because they feared that millions of elderly people would be utterly confused by its description of new health insurance options.

Medicare officials had said as recently as June 4 that they intended to mail the new Medicare handbooks to all 38 million beneficiaries this fall, even though focus groups and surveys indicated that much of the complex information would be incomprehensible to readers.Now Michael Hash, deputy administrator of the Federal Health Care Financing Administration, which runs Medicare, says the agency plans to send the handbooks to just 5.5 million beneficiaries in five states this year. Other officials identified the states as Arizona, Florida, Ohio, Oregon and Washington.

"It's desirable to have more testing and evaluation of the handbook before we mail it to all 38 million beneficiaries," Hash said.

Studies by the government and by the American Association of Retired Persons suggest that many elderly people do not have the slightest idea of the differences between a health maintenance organization and the original fee-for-service Medicare program. Without such information, they cannot intelligently assess the new options.

Members of Congress from both parties had criticized the latest version of the Medicare handbook, saying it would prompt a flood of questions from confused constituents just before Election Day.

Congress created the new options last year to give Medicare beneficiaries a wider range of choices. The options include medical savings accounts and various forms of managed care like those available to workers in private industry. Republicans, in particular, argued that private health plans and insurance companies should be allowed to compete for the business of elderly people, most of whom now get coverage through a highly regulated government program created 33 years ago.

The government will operate a toll-free telephone number to answer questions about the new insurance options. The phone service will begin in October in the five states receiving handbooks.

Beneficiaries in other states will receive a brief newsletter this fall to alert them to the coming changes in Medicare. They will not receive the full handbook until next year, when they gain access to the toll-free telephone number.

Although the handbooks will initially be distributed in just five states, private health plans can sign contracts with the government and can enroll Medicare beneficiaries in other states. So elderly people will probably receive promotional material from health care organizations touting their own plans, and that may leave beneficiaries as confused as the government handbooks would have.

The handbooks will contain detailed information comparing the prices and benefits of private health plans offered to older Americans in different parts of the country.

Sen. Charles Grassley, R-Iowa, chairman of the Senate Special Committee on Aging, said he was surprised by the administration's "sudden change of plans."

Without the handbook, Grassley said, "Medicare beneficiaries have little or no access to objective information about their health plan choices, rights and responsibilities."