Medicare+Choice Trends: Lessons for Medicare Reformers?

April 10, 2003
An early look at 2003 trends in Medicare+Choice plans reveals enrollees are experiencing rising average monthly premiums, increased cost-sharing and eroding benefits, according to a new study released by the Commonwealth Fund.

The study looks at trends in premiums and benefits from 1999 to 2003 for the roughly 4.5 million elderly and disabled beneficiaries enrolled in Medicare managed care plans.

Findings include:

• Premiums are rising. Monthly premiums for enrollees averaged $37, up from $32 in 2003 and $23 in 2001.
• Drug coverage is decreasing. The percentage of enrollees with drug coverage dropped to 69% from 72% in 2002, with more plans limiting coverage to generics drugs.
• Hospital co-payments are increasing common. More plans are charging co-payments for hospital inpatient care, with 82% of beneficiaries enrolled in such plans in 2003 compared with 33% in 2001.
• Co-pays for physician visits are increasing. The percentage of beneficiaries in plans charging co-payments greater than $15 for visits to a primary care physician also increased, to 24% from 4% in 2002.

"The increasing number of Medicare Plus Choice plans requiring co-payments for hospital care, lab tests, or x-rays, and stricter limits on drug coverage is disturbing, particularly as it is the sicker and more vulnerable enrollees who bear much of the burden of these changes.," said Karen Davis, president of The Commonwealth Fund.

"These trends only reinforce the importance of reforming Medicare now to cover pharmaceuticals and limit out-of-pocket cost sharing for all beneficiaries."