MINNESOTA: 1999 Medicare HMO Rates Soar
Minnesota's Medicare HMOs are struggling to continue coverage of the state's seniors under restrictive reimbursement levels, the Minneapolis Star Tribune reports. The Health Care Financing Administration "has practically frozen payments to HMOs under the Medicare program, forcing health plans to ask seniors to share more of the cost." Accordingly, as costs continue to rise, "some of the state's most popular" Medicare HMOs will boost rates 15% to 35%. Kate Stahl of the Minnesota Senior Federation said, "We all expected the rates to go up. But everybody was surprised at the scope of the increases. They are much higher than anybody really expected." And the rates would have been even higher if the HMOs had had their way, the Star Tribune notes; the Minnesota Department of Health struck down as "unjust and unfair" several 1999 increases proposed by HealthPartners and Medica.
Blame It On The Drugs
HMO officials attribute much of the premium increases to the rising costs of (and demand for) pharmaceuticals. George Halvorson, chief executive of HealthPartners, "bristled" at the characterization of the rate hikes as unfair, and said that "[t]o meet actual costs, [HealthPartners] would need to charge each senior who has drug coverage about $1,100 per month, not the $220 rate that will go into effect next year."
Not Keeping Up
The Star Tribune notes that the plans that were able to keep rate increases below 10% were either supplemental policies or plans that were "closed to new enrollees." Earlier this fall, three of Minnesota's largest HMOs announced major adjustments to Medicare services: Medica pulled out of four counties, HealthPartners suffered the defection of several clinics and doctors, and Blue Cross discontinued its Medicare HMO completely. Patsy Riley of Medica said, "the federal payment amount is not keeping up with inflation" (Howatt, 12/4).