With the PPI due out tomorrow, keep in mind that not all prices are falling...including gasoline (if yesterday's retail sales numbers are to be believed) and health care (as well as housing if the Mortgage Bankers Assn is correct)...hmmm, energy, shelter, health...nothing important, though, so disregard!<G>
nytimes.com
February 14, 2002
Personal Costs for Medicare H.M.O.'s Rise
By MILT FREUDENHEIM
lderly and disabled members of Medicare H.M.O.'s used nearly 50 percent more of their own money on average for medical care in 2001 than they did three years ago, health care researchers said yesterday.
The increase was even steeper for those in poor health, according to a new study by Marsha Gold and Lori Achman of Mathematica Policy Research, a nonprofit, nonpartisan research center in Washington. The study was sponsored by The Commonwealth Fund in New York.
Out-of-pocket costs rose 62 percent to $3,578 in 2001 for people in poor health as their share of spending rose for prescription drugs, premiums and other services not fully covered by Medicare. Personal spending rose 43 percent to $1,195 from 1999 to 2001 for those in good health.
The increases were "stunning," said Marilyn Moon, a Medicare policy expert at the Urban Institute, another Washington research center.
"Many people joined H.M.O.'s to try to reduce out-of-pocket expenses," Ms. Moon said. "The bargain was, `we will give up some of our control over medical services in order to have some of our costs reduced.' "
"With costs rising rapidly, this will make people think twice about the value of these health plans," she said.
Ms. Gold said the increases, which were based on government statistics, would be even steeper in 2002. That is because some Medicare health maintenance organizations have stopped paying for drugs completely. Many have stopped paying for brand-name drugs and now cover only generic drugs.
Thomas Scully, administrator of the federal Center for Medicare and Medicaid Services, said the higher costs were "predictable" after five years of 2 percent increases in government reimbursements while costs borne by the health plans were rising at close to double-digit rates.
"It's not the plans' fault, it's the payment system," Mr. Scully said.
He said President Bush had requested a 6.5 percent increase for Medicare H.M.O.'s in the new federal budget. That could "stop the erosion," Mr. Scully said. The administration also wants payments to Medicare H.M.O.'s to be raised to 100 percent of spending for traditional fee-for-service Medicare, instead of the current 95 percent in high-cost areas like New York, Florida and Southern California. Congress has to fix the payment formula, he said.
"As Medicare is limited, it really has an effect on people," Ms. Gold said. But she said the program's managed care plans still provided more, on average, than traditional Medicare. Out-of-pocket costs in the H.M.O.'s averaged $1,438 when both healthy and ill people were counted. That was less than half the estimated $3,142 cost for beneficiaries in traditional Medicare, she said.
The study did not include out-of- pocket costs for people with Medicare supplement insurance, or Medigap. But Ms. Gold said their costs were also higher, on average, than for those in H.M.O.'s.
Glenn M. Hackbarth, chairman of the Medicare Payment Advisory Commission, which advises Congress, said the increased burden on Medicare H.M.O. members was a result of "the backlash against managed care" as health plans were pressed to offer wider choices of doctors while the government squeezed their budgets.
The commission plans to support the 100 percent formula for payments to H.M.O.'s in a report to Congress at the end of this month.
Some consumer advocates are lobbying for a Medicare drug benefit. "We need a prescription drug benefit in Medicare," said John Rother, legislative and policy director of AARP. He said a drug benefit in traditional Medicare would raise the basis for payments to the H.M.O.'s as well. It would also give sicker beneficiaries more affordable choices, he said.
"No one is looking at H.M.O.'s any longer as a way of saving money for Medicare," Mr. Rother said. "The reality is, fixing these problems is going to cost some money." |
