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Medicare+Choice Enrollees Face Continued Cost Increases: Doubled Since
1999
Medicare PPO out-of-pocket costs are even higher
Aug. 11,
2003 - Providing evidence of eroding benefits in the Medicare+Choice
managed care program, a new
Commonwealth Fund report finds that
enrollees' average annual plan premiums and other out-of-pocket costs
rose ten percent in 2003 to $1,964, more than double what they were in
1999.
The
report, Average Out-of-Pocket Health Care Costs for Medicare+Choice
Enrollees Increase Ten Percent in 2003, also reveals that
out-of-pocket spending for enrollees in Medicare PPO (preferred
provider organization) demonstration plans is nearly 50 percent
higher, on average, than costs for Medicare+Choice enrollees. Average
out-of-pocket spending by PPO enrollees is also higher than that
experienced by the average beneficiary in traditional
Medicare--raising questions about whether these plans can offer a
lower-priced alternative for Medicare beneficiaries, according to
authors Marsha Gold and Lori Achman of Mathematica Policy Research,
Inc.
Gold and
Achman estimate that enrollees in PPO demonstration plans, which were
implemented by the Centers for Medicare and Medicaid Services in 2003
to give Medicare+Choice enrollees more plan options, will spend $2,884
out-of-pocket in 2003. That is substantially higher than the $1,964 in
average annual costs for those in Medicare+Choice plans. These cost
estimates are potentially understated because they assume that all
care is received through in-network providers, according to the
report.
Costs for
enrollees in Medicare+Choice have continued to trend upward since
1999, the first year Gold and Achman analyzed beneficiary spending in
the Medicare+Choice program. In 2003, enrollees will pay an average of
$1,964 in out-of-pocket expenses for health care--twice as high as in
1999, when costs averaged $976. "As Congress debates the role of
private plans in the future of the Medicare program, it should
consider the eroding financial protection experienced under
Medicare+Choice," said Gold.
Sicker
Medicare+Choice enrollees face even higher cost burdens. Those in poor
health will spend about three times more out-of-pocket than those in
good health. Costs for sicker plan enrollees also increased at a
faster rate over the four-year period than did costs for healthy
enrollees. From 1999 to 2003, average out-of-pocket costs for
beneficiaries in poor health climbed from $2,211 to $5,305. Annual
costs for those in good health rose from $836 to $1,564.
"Health
insurance is designed to protect individuals from high health care
costs that could inflict financial hardship," said Karen Davis,
president of The Commonwealth Fund. "The steadily increasing financial
burden on sicker beneficiaries is of notable concern."
Average
Annual Out-of-Pocket Cost-Sharing for Medicare+Choice Enrollees,
1999–2003
1999 -
$976
2000 - $1185
2001 - $1438
2002 - $1786
2003 - $1964
Note:
Results are weighted by plan enrollment. Out-of-pocket cost estimates
include the Medicare Part B premium, the Medicare+Choice premium,
spending for physician and hospital copayments, and outpatient
prescription drugs not covered by the M+C package.
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