Seniors Shelling Out More for Medicare+Choice

Out-of-pocket, premium costs jump 10 percent from 1999 to 2003, study says

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MONDAY, Aug. 11, 2003 (HealthDayNews) -- Out-of-pocket costs and average annual plan premiums for people enrolled in the Medicare+Choice managed-care program increased 10 percent in 2003 to $1,964, about double the $976 cost in 1999.

A new report from the Commonwealth Funds also reveals that people enrolled in Medicare PPO demonstration plans had out-of-pocket expenses almost 50 percent higher, on average, than people in Medicare+Choice.

Average out-of-pocket expenses for people in Medicare PPO are also higher than those for an average person enrolled in traditional Medicare.

The report says these findings raise questions about whether these plans can offer a lower-priced alternative for Medicare beneficiaries.

People in the PPO demonstration plans, implemented in 2003 to provide more options to Medicare+Choice enrollees, will spend $2,884 in out-of-pocket expenses in 2003.

The authors of the report note the cost estimates are potentially understated because they assume that all care is received through in-network providers.

The report says that sicker people enrolled in Medicare+Choice are burdened with even higher costs. Enrollees in poor health will spend about three times more out-of-pocket than those in good health. From 1999 to 2003, average out-of-pocket costs for those in poor health increased from $2,211 to $5,305, compared to an increase of $836 to $1,564 for those in good health.

"Health insurance is designed to protect individuals from high health-care costs that could inflict financial hardship. The steadily increasing financial burden on sicker beneficiaries is of notable concern," Karen Davis, president of the Commonwealth Fund, says in a news release.

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SOURCE: Commonwealth Fund, news release, Aug. 11, 2003

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