HMO PREMIUMS: California Insurers Hike Rates for Millennium
Members of a number of HMOs across California will face significantly higher premiums in the year 2000, the Santa Rosa Press Democrat reports. The two largest insurers in Sonoma County, Kaiser Permanente and Health Plan of the Redwoods, will raise premiums by an average of 9% next year, with some larger employers to see rates jump by 15% to 18%. This marks the third consecutive year the two HMOs, which cover about half of the county's population, have increased their premiums. Other insurers in the county also plan rate hikes, although they will be more modest. PacifiCare, responsible for 14,000 area workers, announced recently that it would raise premiums from 6% to 8% for large employers and 9% to 11% for small companies. HealthNet's 10,000 Sonoma County enrollees will be subject to a 7% to 10% increase next year. The HMOs attribute the increase to "[n]ew, more expensive procedures; costly and popular pharmaceutical products such as Viagra and Prozac; and increased cost of medical support personnel, including home health care." In addition, the Press Democrat notes, when HMOs "first jockeyed for market position by lowering rates even as some costs were rising," many ended up in the red, and are now trying to "catch up" (Rose, 9/22).
Not So Sunny In Southern California
As for Medicare HMOs, many seniors in Santa Barbara County will also be confronted with higher premiums, as Blue Cross, PacifiCare and HealthNet all plan to charge higher fees to members of their "popular" Medicare HMO products. The changes are necessary to "offset costs" not covered by Medicare payments, say the insurers. Blue Cross' premiums will rise from no charge to $20 per month, while Pacificare's Secure Horizons Medicare enrollees will go from paying nothing to $50 per month. HealthNet will charge $75 per month next year, up from $50. In addition, higher copayments and reduced benefits "are in the works." The HMOs say the trend in higher premiums and less benefits is likely to continue, as they attempt to remain financially solvent and turn a profit (Schultz, Santa Barbara News-Press, 9/22).