Medicare HMOs Contend Fee Increases Imperative

Medicare HMOs Contend Fee Increases Imperative

BY MARION WEBB






Staff Writer

In a few weeks, San Diegans enrolled in Medicare HMOs will pay more for doctor’s visits and prescription drugs, and for the first time will be charged for hospital admissions.






The four Medicare HMOs remaining in San Diego argue they need to transfer costs to patients, because government reimbursement rates are not keeping pace with rising health care costs.






Aetna Inc. and Blue Shield of California announced in October they will no longer offer Medicare programs in San Diego, leaving some 7,000 members scrambling for alternatives.






The bottom line is managed Medicare is in crisis, said Jeff Lemieux, a senior economist for the Progressive Policy Institute in Washington, D.C.






“In the early 1990s when (government) payment rates were generous, the health plans rushed to the market, but the change in payment rates and regulation caused a 180 degree turnaround,” Lemieux said.






By 1998, health plans began to leave markets and continue to do so.






In San Diego County, where managed care is deeply entrenched, Secure Horizons, Kaiser Permanente, Health Net and Blue Cross of California still offer Medicare HMO programs.






But the new prices will cause hardship for many elderly, said Elsa Mejia, a coordinator at the San Diego health insurance Counseling Advocacy Program, a nonprofit statewide program assisting Medicare beneficiaries.






“It’s a serious issue, (especially) for the poor and will be yet another financial burden,” Mejia said.






Secure Horizons, the nation’s largest Medicare HMO program with 95,500 members in San Diego, will charge between $200 and $400 for each hospital admission. Monthly premiums will rise from $20 this year to $30 in 2002.






The plan is also raising co-payments for each doctor’s visit to $10 and $15 in 2002, up from $5 and $10 this year.






Prescription drug coverage will be capped at $2,000 annually for brand names and generics; anything above that comes out of the patient’s wallet.






Fees on the Rise






Kaiser Permanente, which has 58,000 Medicare members in San Diego, is charging $200 for each hospital stay with an $800 annual cap.






The health organization will also introduce a $50 charge for ambulance services next year.






Emergency room co-pays will rise to $50 in January from the current $20 fee.






Monthly premiums will nearly double from $30 currently to $57 in 2002.






Kaiser is also introducing a 20 percent charge for the cost of assisting devices, such as wheelchairs, pumps and prosthetics.






That is in addition to a new $2,000 annual cap for prescription drugs, Mejia said.






Sylvia Wallace, a local spokeswoman for Kaiser, said the plan had no other choice “with medical costs going through the roof.”






Kaiser projects prescription drugs will rise an estimated 18 percent in 2002 with hospital admissions and in-patient costs rising.






Then there are additional costs to pay for state mandatory earthquake safety measures and new nurse-staffing ratio.






HMOs Raise Deductibles






Kaiser is hardly alone. Health Net and Blue Cross are also raising prices across the board.






The two Medicare HMOs will introduce hospital deductibles, with Health Net charging patients $400 for each hospital stay and Blue Cross charging $125 per day in the hospital with a $2,000 cap for the year.






Health Net, which has 6,000 Medicare members in San Diego, will raise co-payments by $5 for monthly premiums and doctor’s visits starting Jan. 1.






The cost sharing is needed to offset lagging government reimbursement rates, said Brad Kieffer, a spokesman for Health Net.






On the prescription drug front, however, Blue Cross is making a sweeping change.






In 2002, the health plan’s 3,171 Medicare enrollees will no longer be covered for brand-name drugs, citing escalating costs for prescription drugs. Health Net made a similar change last year.






Both plans still offer generics.






But for Medicare HMO enrollees dependent on brand-name drugs, that is little consolation, Mejia said.






A statewide program that offers prescription drugs at discounted prices could provide some relief for eligible Medicare recipients, she said, but with discounts ranging between 10 cents and up to 50 percent, the benefits gap is wide.






The other option is to return to the traditional Medicare fee-for-service program, she said.






“But with a hospital deductible of $812, a 20 percent co-payment, no coverage for prescription drugs, (this type of) coverage is not a viable option for seniors,” she said.






Supplemental Medigap policies exist, but with monthly premiums spanning between $150 and $200, most seniors can’t afford to pay for them, she said.






Elderly Find Fewer Providers






Medicare HMOs remain the only affordable programs for most elderly patients, Mejia said.






Lemieux isn’t alone in saying that sweeping changes are needed to save Medicare HMOs.






Health plans continue to withdraw from counties where they feel health care costs are too high, he said. Health Net, for instance, will pull out of six California counties next year and Secure Horizons said it will leave eight counties in the state.






Even those remaining in San Diego say that medical economics will determine future decisions.






For Blue Shield and Aetna, the San Diego market simply was no longer viable, their spokespeople said.






“To maintain a profit margin of less than 2 percent, we would have been charging $150 in monthly premiums and that’s not competitive in the (San Diego) market,” said Kirk Glove, a spokesman for Blue Shield.






Aetna spokeswoman Rachelle Cunningham said the Medicare HMO decided to leave the county because the medical cost ratio far outpaced reimbursement.