|
|
Shift in Medicare Use Expected
Milt Freudenheim, The New York Times
September 9, 2004
The new, sharply higher charges announced for Medicare beneficiaries last week may prompt more elderly people to join Medicare health maintenance organizations operated by private industry, according to health insurance executives and industry analysts.
The 17.4 percent increase, to $78.20 a month in the Medicare premiums that mainly pay for coverage by doctors, was the largest one-step increase since the start of the program in 1965. Patients with chronic conditions that require a lot of hospital care will face an increase in their out-of-pocket expenses - to charges of $228 a day after they spend 30 days in a hospital and $456 a day after 90 days. That compares with $219 and $438, previously. Those higher charges, analysts say, may prompt some consumers to look anew at Medicare-subsidized private insurance programs. Enrollment under the private industry plans was down to 4.6 million elderly patients last year, from a peak of 6.3 million in 1999, because some private insurers stopped offering the programs after a cutback in federal subsidies.
The Bush administration raised government subsidies to the health maintenance organizations last January, trying to reverse the decline in the Medicare-subsidized private health plans. About $1.75 of next year's $11.60 premium increase is meant to help cover the federal subsidies.
The federal Centers for Medicare and Medicaid, which oversees the Medicare program, announced its increases for 2005 last Friday. Health insurance companies intending to offer Medicare-subsidized plans for next year have a federal filing deadline of Monday. Industry experts say they are expecting a substantial number of expansions in managed care plans to be announced next week, in response to the higher subsidies.
Whether under Medicare directly or under a Medicare-subsidized H.M.O., a beneficiary pays the same monthly Medicare premium. The H.M.O. may also charge its own, separate premium. To attract subscribers and thereby receive the federal subsidies, Medicare H.M.O.'s sometimes offer various inducements, like better drug coverage or lower co-payments or - in a few cases - a refund of part of the monthly Medicare premium. For example, Secure Horizons, the big Medicare unit of PacifiCare Health Systems, has been refunding $22 a month to members in San Antonio, said Cheryl Randolph, a PacifiCare spokeswoman.
Health insurers are typically close-mouthed about their intentions, to keep competitors in the dark. But Dr. Akshay Desai, the chief executive of Universal Health Care, a small physician-owned H.M.O. based in St. Petersburg, Fla., said his company planned to refund the entire new total of $78 a month to members in Hernando County near Tampa.
Enrollment in Universal Health Care, which also operates H.M.O.'s in Sarasota and Bradenton, rose sharply when the company started the refund policy last March, he said. Dr. Desai said Universal, which has 5,000 members, also partially covers Medicare patients' out-of-pocket hospital charges.
Medicare patients pay an annual deductible before hospital coverage begins.
The 2005 deductible will be $912, compared with $876 currently.
Ira S. Loss, a health care expert with Washington Analysis, an investor's service, noted that most of the big publicly owned insurance companies that withdrew from Medicare programs when Congress reduced the subsidies in the late 1990's had not announced plans to expand now.
Another health care analyst, William McKeever at UBS, expects many big insurers to take a wait-and-see attitude with Medicare. "The overarching issue is what will happen in the presidential election," he said.
Cigna, for one, does not have expansion plans for 2005, beyond its remaining Medicare program in Arizona, according to Wendell Potter, a Cigna spokesman. "We are re-evaluating for 2006," he said.
Several companies, including PacifiCare and Aetna, said they were not ready to discuss details of their Medicare planning until they had filed them with the Centers for Medicare and Medicaid.
A limited drug benefit for all Medicare beneficiaries takes effect in 2006, under the Medicare law enacted last December. That could undercut the drug coverage that is currently one of the main attractions of many Medicare H.M.O.'s. Democrats have criticized the federal subsidies to the private insurance industry, and some in Congress want to roll back parts of the new Medicare law.
But Paul P. Heldman, an analyst at the Charles Schwab Washington Research Group, said that "if Bush wins re-election, he is going to do what he has to, to make the Medicare program a viable business opportunity.
"We are not far enough along in the process to really know whether or not there is going to be major growth in participation by health insurers," Mr. Heldman said.
|
|
