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Study: Some Medicare HMO Costs to Rise

Updated:
NEW YORK (AP) _ Out-of-pocket costs will jump 10 percent in 2003 for people enrolled in Medicare health maintenance organizations, a new study found.

Patients in Medicare HMOs will spend a total $1,964 on their HMO premium, the Medicare Part B premium, doctor and hospital co-payments and prescription drugs, according to a study commissioned by the Commonwealth Fund, a private foundation supporting research on health and social issues. That is a 101.3 percent increase from 1999, according to the study.

The study comes as Congress debates adding a prescription drug benefit to Medicare that is expected to rely heavily on private insurers for delivery.

``It's not clear that Medicare HMOs are less expensive (for patients) than traditional Medicare ,'' said Marsha Gold, senior fellow at Washington D.C.-based Mathematica Policy Research, which conducted the study by analyzing current and historical Medicare data.

Gold said Congress should consider the financial burden private plans place on people while discussing changes to the Medicare program.

The biggest chunk of spending _ 36 percent_ is for the Medicare Part B premium, which costs $704 a year and covers ambulatory care. Medicare does not charge for Part A, which covers hospitalization.

The biggest rise in spending was for the Medicare+Choice premium, which jumped an average of 18 percent to $447 a year. It represents 22 percent of total spending.

Drug spending represents 26 percent of the total, or $512 a year. It rose 11 percent.

Physician and hospital co-payments represented 15 percent of the total or 301 a year, which was relatively flat with 2002.

Patients who describe themselves as in poor health enrolled in Medicare HMOs, called Medicare+Choice plans, will see their costs rise 10.9 percent to $5,305.28. Those who describe themselves as in fair health will see their costs jump 10.8 percent to $2,695.70. According to a 1999 Medicare Current Beneficiary Survey, 15 percent of Medicare+Choice enrollees report being in fair health while 6 percent said they are in poor health.

The study also found that Medicare patients in enrolled in preferred provider organizations, which offer greater flexibility, will spend $2,884 this year. The PPOs are part of new demonstration project so there is no comparative data.
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