MEDICARE HMOs: California Seniors Face Sharply Higher Drug Costs
As of the beginning of the year, "tens of thousands of ... California seniors" in Medicare HMOs "are being asked to pay up to five times as much for brand-name drugs, many of which do not have cheaper, generic equivalents." According to HMO executives, the "hikes in medication copayments were needed because pharmaceutical drug costs are soaring and Medicare reimbursement rates for services are dwindling." The Sacramento Bee reports that the "changes have patients and their doctors fuming." There has been a "surge in complaints" to consumer hotlines and "senior advocates are scurrying to help their clients better understand their ever-changing coverage." Many of the seniors enrolled in the HMOs "on the promise of generous drug benefits they would otherwise be denied under regular Medicare coverage," the Bee reports. Diane Archer, executive director of the Medicare Rights Center, said, "My best advice for seniors is to appreciate that premiums can go up every year and these additional benefits can vanish at any time."
To date, "[n]early 1.5 million California seniors have opted to join an HMO." According to the Bee, pharmacy benefits have been altered "for members of at least three California Medicare HMOs." For instance, "Sacramento County members of Health Net's Seniority Plus and Foundation Health Plan's Senior Value, which have merged under Health Net's umbrella," saw the copayment for brand-name prescription drugs quintuple from $5 to $25. "At PacifiCare's Secure Horizons ... about 35 common name-brand drugs that were priced at $7 now cost $25 -- including some that have no generic equivalents." Arthur Southam, president and CEO of Health Net, said that "Medicare reimbursement rates have not kept pace with the cost of providing care." He said, "I don't think anyone is duping seniors. I think we are providing an outstanding value" (Griffith, 1/24).