COLUMBUS, Ohio, April 1 /PRNewswire/ -- Medicare HMO/PPO plan members in 25 major and mid-size metropolitan areas can expect to realize single and in many instances double-digit percentage decreases in their out-of-pocket healthcare costs for 2004 based on independent findings from a study conducted by HealthMetrix Research. A key provision in the Medicare Modernization Act of 2003 resulted in HMOs/PPOs receiving increased payments from Medicare averaging 10.9% per enrolled member beginning March 1st.
According to HealthMetrix Research president Alan Mittermaier, “The findings indicate that Medicare plans have opted to pass along major savings in out-of-pocket costs to their members by reducing or eliminating monthly premiums, enhancing prescription drug benefits, and reducing or eliminating copayments for physician office visits and inpatient hospitalizations. Beyond the immediate dollar savings, the findings suggest that HMOs/PPOs are serious about restoring goodwill with their members that was badly damaged from the effects of benefit cutbacks, increased cost-sharing and market withdrawals since 1998.”
The independent study was based on the Medicare CostShare Report comparisons of the estimated annual out-of-pocket costs for 2003 and 2004 among 50 HMOs/PPOs in 25 markets across the U.S. The Medicare CostShare Report methodology developed by HealthMetrix Research estimates annual out-of- pocket costs for HMO/PPO members based on health status categories (“healthy”, “episodic”, “chronic”) and corresponding utilization of the most common HMO/PPO benefits (physician office visits, emergency care, inpatient care, prevention care, prescriptions). The estimated out-of-pocket costs were generated from 2003 and 2004 HMO/PPO plan benefit summaries posted on the http://www.medicare.gov/ website.
The 50 Medicare plans included in the study were: Aetna Health (5); Blue Cross-Blue Shield affiliated plans (7); Coventry Health (3); Health Net (5); Humana (5); Kaiser Permanente (6); PacifiCare (6); United HealthCare (5); and selected provider-sponsored plans (8). Two plans were PPOs and the remaining 48 plans were HMOs. All 50 HMOs/PPOs offer prescription drug benefits in addition to the standard Medicare benefits.
The key findings from the study were: 1. Members in 40 of the 50 plans (80%) within the “healthy” and “episodic” health status groups can expect their estimated 2004 out- of-pocket costs to be less than for 2003 (excluding the Medicare Part B monthly premium which increased to $66.60 for 2004 from $58.70 in 2003). 2. Members in 31 of the 50 plans (62%) within the “chronic” health status group can expect their estimated 2004 out-of-pocket costs to be less than for 2003. 3. Provider-sponsored HMO/PPO plans collectively are less generous in passing along cost-savings to members than the larger corporate- sponsored HMO/PPO plans. Although beyond the scope of the study, this finding suggests that provider-sponsored plans intend to spend more of their additional Medicare revenue on strengthening provider networks versus lowering member out-of-pocket costs. 4. The most common benefit enhancements effective March 2004 resulting in out-of-pocket cost-savings among the 50 plans were: expanded prescription drug coverage (23); reduction in monthly premium (21); reduction in physician office copayments (11); reduction in hospital inpatient copayments (9). 5. The most dramatic real-dollar reductions (where estimated 2004 cost- sharing amounts approached 2001 cost-sharing levels) were found with Medicare plans in the following markets: Health Net (Richmond County, NY); Kaiser Permanente (Los Angeles, San Diego); Horizon Healthcare/Blue Cross-Blue Shield (Hudson County, NJ); and United HealthCare (Tampa, FL).
Alan Mittermaier cautions, “the short-term outlook is positive for both Medicare HMOs/PPOs and their members even as healthcare and drug costs continue to soar. The next challenges will occur in 2006 with the implementation of the voluntary Part D prescription drug benefit and a new competitive bidding program that will determine payments to Medicare plans. Given the additional uncertainties of operating within a regulatory environment, either of these events may trigger another round of benefit cutbacks, increased cost-sharing and HMO/PPO withdrawals unless the Medicare plans are successful in restraining the rate of growth in utilization without sacrificing members’ health outcomes.”
HealthMetrix Research provides independent Medicare HMO/PPO plan cost- sharing comparisons on-line at http://www.hmos4seniors.com/ for a national audience of managed care organizations, healthcare providers, consumers, and media. The Medicare CostShare Report neither recommends nor endorses specific managed care plans.
Media inquiries and requests for specific HMO/PPO study findings can be directed to:
Alan Mittermaier, President 614-428-9064 healthmetx@aol.com
HealthMetrix Research Inc.
CONTACT: Alan Mittermaier, President of HealthMetrix Research Inc.,+1-614-428-9064, or healthmetx@aol.com
