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Health Care Insurance Premiums Rise 10% to 30% Higher Across Country Shock is setting in for some Medicare beneficiaries. "Oh my," said Dorothy Ramsay, 73, of Woodbridge, Virginia. "They want to go from $49 to $89? When people hear this it's going to be hell, excuse me." Supplemental health insurance premiums are increasing by 10% to 30% across the country. Rates for prescription drug coverage are expected to increase by 19%-an all-time high. The rate increases, according to some industry analysts, are expected to be the highest in more than a decade. Rate hikes are particularly stiff for Medicare Health Maintenance Organizations (HMOs), fueled by soaring prescription drug costs. The California Public Employees Retirement System, the nation's second largest employee benefits provider, reports that rates for Medicare HMOs will rise 31.7%. The rate hikes come as nearly 1 million Medicare beneficiaries will be dropped by their HMOs by December 31, 2000. While many HMOs are cutting Medicare plans, those remaining are taking steps that sharply increase out-of-pocket costs for Medicare members. Kaiser Permanente, for example, recently sought federal approval to raise monthly Medicare HMO premiums from $19 to $69 in Washington DC, $49 to $89 in Northern Virginia, and from $19 to $79 in the Baltimore area. There was no monthly premium when the plan was first offered in 1997. Kaiser, which has 552,000 senior customers in the region, also plans to limit the choice of doctors. Instead of choosing from a 3,000 member network in this region, Kaiser's "Senior Advantage" HMO members will have to choose from 800 doctors at 24 medical centers. Sources: "Kaiser to Raise Some Premiums," Bill Brubaker, The Washington Post, July 15, 2000. "Health Care Costs to Increase at Double-Digit Rates," Buck Consultants, Mellon Financial Corporation, September 6, 2000. "Healthcare Premiums to Rise 11-12% in 2001," Corporate Research Group, Inc., August 16, 2000. This article first appeared in Volume 6, Issue 2 of "The Social Security and Medicare Advisor" newsletter (December/January/2001). To receive future editions of "The Advisor" in its special, free e-mail version, please click here. | ||||||||
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