Fewer ‘Best Value’ HMOs Available for Medicare Beneficiaries in California, Report Finds
Medicare beneficiaries in California HMOs in 2003 pay more for coverage but receive fewer benefits than in the past, according to a report released today by the California HealthCare Foundation and Consumers Union, the AP/Fresno Bee reports. About 33% of the state's four million Medicare beneficiaries are enrolled in HMOs (Fouhy, AP/Fresno Bee, 4/2). The report, titled "Guide to California Medicare HMOs," ranked HMOs in the state based on a comparison of the out-of-pocket costs that Medicare beneficiaries pay and the benefits that they receive. HMOs that receive one star are considered equivalent to traditional Medicare fee-for-service coverage and those that receive five stars are considered the "best value," the Contra Costa Times reports (Silber, Contra Costa Times, 4/2). Eleven percent of Medicare HMOs in the state received four or five stars this year, compared with 18% last year and 44% in 2001 (Wolfson, Orange County Register, 4/2). Over the past three years, Medicare HMOs have increased premiums and other out-of-pocket costs and reduced benefits, Ann Monroe, director of the CHCF Quality Initiative, said (Chong, Los Angeles Times, 4/2). She added, "It's really getting harder and harder for consumers to find good value" in Medicare HMOs (Contra Costa Times, 4/2).
Denise Hanson, Director of Medicare and State programs for Kaiser Permanente, said that Medicare HMOs have increased out-of-pocket costs for beneficiaries because of decreased reimbursements. Medicare has capped reimbursement increases for HMOs at 2% per year since 1997, but health care costs have increased by an average of 8% per year over the same period, she said (AP/Fresno Bee, 4/2). "With the government taking more money out of the Medicare program, health plans have had no choice but to pass more cost on to the consumer," Trudy Lieberman, director of the Center for Consumer Health Choices at Consumers Union, said. The report recommended that Medicare beneficiaries enroll in supplemental Medicare programs offered by health plans, which have monthly premiums of about $120, rather than Medicare HMOs (Rose, Santa Rosa Press Democrat, 4/2). "People can't assume the plan that they've had for a number of years is still the right plan for them because there have been so many changes," Monroe said.
Most of the state's top-rated Medicare HMOs are located in the Los Angeles area, the Times reports. According to Sandy Risdon, program manager for the Health Insurance Counseling and Advocacy Program, southern California has maintained top-rated HMOs because the competition for Medicare funds "is so fierce," the Times reports (Los Angeles Times, 4/2). The Los Angeles area has higher Medicare reimbursement rates than other parts of the state, as well as a higher concentration of residents, which allows Medicare HMO to spread risk, Monroe said (Contra Costa Times, 4/2). The report is available online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.