Medicare HMO rates to fall
3 largest insurers in Mass. plan cuts, credit rising US fees
It's news senior citizens haven't heard in years: The state's three largest health insurers will significantly reduce premiums for seniors in their Medicare HMOs, in some cases by nearly 50 percent, providing some relief from four years of dramatic price increases.
Executives decided to cut premiums after the federal government said it will pay an average of 10.6 percent more to health insurance companies that operate private Medicare HMOs, which have been losing customers. Medicare HMOs allow senior citizens to choose a managed-care option rather than the traditional fee-for-service Medicare program. The nation's health maintenance organizations are required to tell the government by tomorrow whether they plan to increase or reduce premiums and benefits on March 1.
Tufts Health Plan, which operates Secure Horizons, the largest Medicare HMO in Massachusetts, is reducing premiums by an average of 23 percent. The government pays HMOs varying amounts to insure members depending on the county in which they live, so premiums -- and reductions -- differ widely. Secure Horizons members who live in Barnstable County will get the largest cut, 46 percent, bringing their monthly premium down to $80. Members living in Suffolk County will get only a 4 percent reduction, dropping their monthly premium to $141.
Some senior citizens were elated at the financial relief. Longie Chetkauskas, 81, of Canton, and his wife pay $264 a month for coverage from Secure Horizons -- a premium that will fall to $162 on March 1. "With the costs going up as much as they have, I was considering leaving them," Chetkauskas said. "Now I will stick with them."
Blue Cross and Blue Shield of Massachusetts, which operates Blue Care 65, will slash premiums 36 percent to 48 percent. Senior citizens who live in Essex and Plymouth counties will get the largest percentage drop, and will pay $84 a month. Harvard Pilgrim Health Care said it will reduce premiums for members of its First Seniority HMO by 13 percent and 18 percent in the four counties where it operates.
The plans will use a portion of the extra federal money to raise payments to doctors and hospitals for treating Medicare HMO members, though they declined to say how much.
The cumulative impact of four straight years of rising fees has caused many seniors to drop out of Medicare HMOs, which provide broader coverage than traditional fee-for-service Medicare run by the government but limit members to specific networks of doctors and hospitals. Doctors have complained that Medicare HMOs don't pay them enough to care for elderly patients, and hundreds have dropped out of the HMO networks, refusing to treat elderly members enrolled in the plans.
The number of senior citizens enrolled in Secure Horizons, for example, dropped to 55,000 from 101,249 three years ago, while the number of primary care physicians in the network fell to 550 from a peak of 1,566 in 1998.
Health plan executives have blamed the federal government for limiting increases in the per-member monthly fee to 2 percent annually. Meanwhile, they said, medical costs rose 8 to 10 percent. Currently, 4.6 million of the 41 million Medicare beneficiaries are enrolled in Medicare HMOs.
Congress approved the new funds as part of the Medicare prescription drug benefit law signed by President Bush in December. The president and health plan executives hope the new money will help them persuade senior citizens to return to the program. But that could prove difficult.
Because of the program's instability, many senior citizens are distrustful.
Thomas Maloney, 69, of Braintree, dropped out of Secure Horizons in 2002 when the doctors he and his wife see at Massachusetts General Hospital left the network, saying the fees were too low. Instead of switching physicians, they decided to return to traditional Medicare and pay for a supplemental Medex policy to cover long hospital stays. Even if Tufts lures back the Mass. General doctors with higher fees, he won't rejoin.
"We're paying more now, but it's secure," he said. "The bottom line is we don't know where the government is going with this program."
Liz Kowalczyk can be reached at kowalczyk@globe.com. 