Physician's Capitation Trends
Medicare HMO insurers lower rates to seniors
Several major health plans recently announced they would reduce premium costs to beneficiaries in their Medicare HMO plans. Their announcement came on the heels of HCFA announcing increases in payments to Medicare HMO insurers for the year 2001. Here are three recent examples:
• Independence Blue Cross, based in Philadelphia, announced that it would reduce its premiums by 9% to $59 a month for some 60,000 senior HMO enrollees; and by 5% for enrollees in its alternative HMO plan, in which beneficiaries pay $114 a month.
• The Bloomington, MN-based HealthPartners, announced that it will reduce premiums by more than 23%. Its Medicare HMO, Partners for Seniors, will offer a reduction from $99.50 to $76 per month. The plan also announced it will extend its travel benefit at no cost from the current coverage of $5,000 to $100,000 for beneficiaries who receive care out of state.
• Atlanta-based Blue Cross and Blue Shield of Georgia announced an 11% reduction in its senior HMO offerings, which brought the monthly premium to $35.50.
• The cuts to consumers may have stemmed from the Medicare, Medicaid and CHIP Benefits Improvement and Protection Act of 2000, passed in December, which allocated Medicare+Choice plans $9 million over 5 years as part of an $11 billion package. Some Congressional critics complained that the increases would have been better used to improve benefits — such as hotly debated pharmaceutical benefits.
Pharmacy costs are spiraling upward while HMOs are dropping out of Medicare, often citing drug costs as the reason. (For an update on the protracted issue of drugs and Medicare HMOs, see Physician’s Managed Care Report, February 2001.)
Growing fears of a recession make saving money on expensive necessities like prescription drugs even more important, according to Celinda Lake, president of Lake Research, a public opinion polling firm based in Washington, DC. For Gore supporters, this issue ranked No. 2, and for Bush supporters, it came in at No. 5, she reports. If economic woes persist, the difference in the two camps of voter opinion could shift dramatically, she says. Also, economic pressures coupled with an evenly split Congress suggest that the debate is likely to soar in early 2001.