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Senior Health Care Costs May Exceed Projections Industry estimates for spending on prescription drugs and other out-of-pocket senior health care costs for 2000 are significantly higher than comparable government estimates. Medicare beneficiaries face double-digit increases in spending on prescription drugs, health insurance premiums, and other out-of-pocket health care costs although Social Security benefits only increased by 2.4% in 2000. Government figures released in July of 1999 projected that spending on prescription drugs would grow about 11.2% annually during 1999 and 2000. Yet spending in1999 was about 16%. Industry analysts project an 18% increase for 2000. Medicare recipients belonging to Health Maintenance Organizations (HMOs) have to pay three times as much in monthly premiums in 2000 and find HMOs far less willing to pay for their pharmaceuticals. In a sharp reversal of recent trends, no HMO that accepts Medicare patients in 2000 covers the full cost of a patient's medicine. The average co-payment for brand-name prescription drugs increased 21% and 8% for generics. In addition to requiring new and higher co-payments for prescription drugs, many plans are setting new limits on how much they will cover, with nearly one-third setting that limit at no more than $500 per year. Source: "U.S. Says Drug Spending to Grow 11.2% Yearly over Next 2 Years," Bloomberg Business News, July 11, 1999. "HMO Crisis Underscored by Health Care Expert," AOL Business Wire, ExperTeam Health Care Consultants, September 29, 1999. "Elderly Face Health Premium Hike," Amy Goldstein, The Washington Post, September 23, 1999. AV5#2/12/99/1/00/REV7/00/WC301 This article first appeared in Volume 5, Issue 2 of "The Social Security and Medicare Advisor" newsletter (December/January/2000). To receive future editions of "The Advisor" in its special, free e-mail version, please click here. | ||||||||
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