Faced with ballooning costs, Kaiser Permanente of the Mid-Atlantic States said yesterday that it will move members covered by its Medicare HMO to a new plan in 2003 that will tinker with benefits and cost more.
Kaiser, unlike some other health maintenance organizations, decided to alter its coverage instead of dropping its members - about 24,000 in Maryland, Virginia and Washington. But the company said it could no longer provide coverage that was not more fully reimbursed by the federal government health program for seniors.
The company did not say how much the premiums would increase or what specific changes would be made to benefits. Kaiser, along with other HMOs, by law will notify members in early October of changes to the plan.
Kaiser also would not say how much it may be losing on the existing program. The new plan will ensure that the company collects more of its actual costs, a spokesman said.
"While many plans around the country are altogether discontinuing Medicare HMO coverage, we are committed to servicing our Medicare beneficiaries and to ensuring they continue to receive comprehensive and quality care from the Kaiser Permanente physicians they know and trust," Bill Little, health plan vice president, said in a statement.
"To a great extent, these changes are the result of ongoing funding inadequacies in the Medicare+Choice program."
Medicare+Choice is what the government calls its Medicare HMO program. The HMOs allow seniors access to benefits such as drug coverage that are not offered by Medicare alone.
Kaiser's existing plan, called Senior Advantage, and the new plan, called Medicare Plus, both offer some prescription drug coverage and preventative health care.
Kaiser has 13,184 members in Maryland, 7,778 in Virginia and 3,409 in Washington. They pay premiums of $79 to $119 a month.
Susan Pisano, a spokeswoman for the American Association of Health Plans, said members are all facing an "arithmetic" problem. Costs are rising 10 percent to 15 percent annually for the plans, but reimbursement from the government is rising 2 percent.
"Plans have been looking at ways they can continue to stay in the program and service beneficiaries well," she said.
Mila Becker, a senior legislative representative at AARP, said the trend is troubling to seniors who do not yet know what their benefits will be in the coming year. Several hundred thousand beneficiaries have had their HMO Medicare coverage dropped in recent years, she said. More have changes made to their plans.
"This causes great upset to the beneficiaries," she said. "Change isn't easy, especially when you're talking about your health care. ... There's a lot of volatility in the market, and we don't yet know the full impact for next year."