Minnesota Medicare HMOs Lower Premiums, Boost Benefits
Minnesota's two remaining plans participating in the Medicare+Choice program have announced that they will take the "unprecedented" step of lowering premiums and increasing benefits beginning next month, the Minneapolis Star Tribune reports. UCare Minnesota and HealthPartners said that recent funding increases provided in the Medicare "giveback" legislation Congress passed last December led to their decision (Howatt, Minnesota Star Tribune, 2/9). Under the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (HR 5661), plans participating in Medicare+Choice will receive $11 billion over the next five years in additional funding (Kaiser Daily Health Policy Report, 1/26). The legislation also was intended to reduce some of the disparity in Medicare reimbursement rates between urban and rural states. Under the current reimbursement system, Minnesota managed care companies receive "much lower" federal reimbursements rates than plans in other states. Because of the low reimbursement rate, which is determined by a congressionally created formula, UCare Minnesota and HealthPartners said they were forced to raise premiums "sharp[ly]" last year, while two other companies -- Blue Cross and Blue Shield of Minnesota and Medica -- dropped out of Medicare+Choice altogether (Minneapolis Star-Tribune, 2/9). Under the legislation, UCare Minnesota and HealthPartners will receive roughly 13% more per member than they did last year, according to Peter Wychoff, executive director of the Minnesota Senior Foundation, Metro Region, (Majeski, St. Paul Pioneer Press, 2/9).
Impact on Beneficiaries
Starting next month, HealthPartners, which serves 18,000 Medicare beneficiaries, will decrease premiums for its plan with a prescription drug benefit from $324 a month to $300.50. Its "standard plan," without a drug benefit, will decrease from $99.50 to $76 (Minneapolis Star-Tribune, 2/9). In addition, the limit on health services when traveling in both plans will increase from $5,000 to $100,000 (St. Paul Pioneer Press, 2/9). UCare Minnesota, with 24,000 Medicare beneficiaries, will lower the monthly premium for its base package without a drug benefit from $56 to $36. The premium for its more enhanced plan will decline from $87 to $81, and a "small prescription drug benefit" will be added to the package. Minnesota Congress members "applauded" the health plans for their actions (Minneapolis Star Tribune, 2/9). In fact, the Minnesota plans seem to be in the minority. Most plans have announced that the BIPA funds will be used to increase reimbursement to providers not to help beneficiaries. Also, a total of only five plans of the 60 or more than had intended to withdraw from Medicare+Choice for 2001 have decided to return to the program due to the extra reimbursement (Medicine and Health, 1/29)
