NCPA - National Center for Policy Analysis

Medicare HMOs To Announce Cutbacks

September 13, 1999

Medicare Health Maintenance Organizations (HMOs) are expected to announce increased premiums, higher patient charges or cutbacks later this week. Several insurers, however, have given USA Today a preview of what to expect.

  • PacifiCare will increase premiums for 55 percent of its members, increase office visit payments for 60 percent and reduce benefits for 75 percent.
  • Humana will begin charging patients $200 a day for hospital care, up to a maximum of $600 a year, and begin charging monthly premiums ranging from $20 to $40 in most of its markets.
  • Kaiser Permanente will raise monthly premiums for some of its members by $1 to $20 next year.
  • Blue Cross/Blue Shield will make some drug benefit changes and at least six of its 22 plans will begin charging monthly premiums of $20 to $50.

With the exception of Kaiser Permanente, Medicare HMOs by and large blame inadequate government payments as the factor responsible for cutbacks and rate increases.

Source: Julie Appleby, "Seniors Face Medicare HMO Cutbacks," USA Today, September 13, 1999.


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