HMO study shows higher costs for Medicare recipients

September 22, 1999
Web posted at: 11:59 a.m. EDT (1559 GMT)

WASHINGTON (CNN) -- Vice President Al Gore released a federal report Wednesday showing health maintenance organizations (HMOs) are restricting prescription drug coverage and charging higher premiums to Medicare recipients.

The report, prepared by the Department of Health and Human Services, shows a growing number of HMOs are imposing a $500 per year spending cap on prescription drug benefits. Nearly one-third of the Medicare HMOs will have those annual caps in 2000, a jump from 21 percent in 1999.

The report also says:

• Managed-care plans are charging higher co-payments for prescription drugs. By 2000 no Medicare beneficiary will have access to a prescription drug benefit without a co-payment.
  
  
• Managed-care plans are charging higher premiums.
  
  
• Some 80 percent of residents of rural areas have no access to managed-care plans that provide prescription drug coverage.
  
  

Gore said the report shows the need for Medicare reforms. The Clinton administration has proposed changes in the Medicare system that include universal drug coverage.

The report also says disabled and older Americans are more vulnerable than other health care consumers to volatility in the HMO market.

About 6.3 million Medicare beneficiaries are enrolled in health maintenance organization plans, more than double the number of four years ago.