MEDICARE HMOs: PacifiCare, Kaiser Raise Premiums
PacifiCare Health System announced Friday that next year, seniors covered under its Secure Horizons plan will fork over on average more than twice what they paid previously for monthly premiums, the AP/Santa Rosa Press-Democrat reports. The increase affects roughly 3,400 seniors in Sonoma County, where premiums will jump to $70 a month next year, up from the current $40. Robert O'Leary, PacifiCare's president and CEO, said, "Medical inflation is here, and until more dollars are put back into the program, we are asking consumers to help us cover more of the cost." Premium increases in other counties vary based on how much each region is reimbursed by Medicare. Health care companies in rural areas generally receive less money than urban areas, Nick Franklin, PacifiCare spokesperson, explained (9/16). For example, seniors in El Dorado County will pay $100 a month next year, while San Francisco seniors will pay only $50 a month, up from this year's $20 a month (Bernstein, Los Angeles Times, 9/16). Meanwhile, seniors in Los Angeles and Orange counties continue to pay no premium at all (AP/San Diego Union-Tribune, 9/16). In a similar move, Kaiser Permanente's Senior Advantage Medicare HMO in January 2001 will change its policy and begin charging a monthly premium in every county, affecting 600,000 members statewide. In Sacramento, where Kaiser serves as the dominant Medicare HMO, members will pay a $50 per month premium. Denise Hansen, who oversees Senior Advantage in Northern California, said, "This was the best way for us to continue to offer a competitive, comprehensive plan."
Still Many Choices
The premium hikes come at a time when a majority of plans have pulled out of the Medicare market, affecting 57,000 California seniors who will be dropped from an HMO. In contrast, Kaiser Permanente and PacifiCare, which control more than 70% of the Medicare+Choice market, did not exit from a single county. Jack Christy, director of the California HealthCare Foundation's Medicare Project, said that although seniors are left with fewer insurance options, "the remaining players will stand firm." He added, "The bottom line is that Medicare HMOs are still strong in California. There are still many choices in many counties" (Fisher, Sacramento Bee, 9/17). California's situation is not unique. Following HCFA's announcement on Friday of all approved Medicare HMO changes and premium hikes, HCFA Administrator Nancy-Ann DeParle noted that "[p]remiums are increasing by a weighted average from $12 to $26 a month. And the generosity of drug coverage will also decline" (Los Angeles Times, 9/16).