Published Tuesday, Sept. 25, 2001
MERCER COUNTY
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Medicare HMO customers could see their costs jump 130 percent under latest plan
Herald Business Editor
Seniors in Mercer County with a Highmark Blue Cross/ Blue Shield Medicare HMO product could see their monthly rates skyrocket up to 130 percent with fewer benefits.
Even more startling may be that seniors in Mercer County will pay a whopping eight times more in monthly premiums than Lawrence County residents for a similar health insurance package.
Highmark announced the price hikes Monday and filed its request with The Centers for Medicare and Medicaid Services, formerly known as the Health Care Financing Administration. Agency approval is expected next month with the new rates to become effective Jan. 1.
As western Pennsylvania's No. 1 health-care insurer, Highmark's actions often have far-reaching effects. Nearly 5,000 Mercer County seniors have a Medicare HMO through Highmark, making the Pittsburgh-based nonprofit company the top insurer here.
Highmark acknowledged the price hikes are huge for the product lines, which it markets under the brand name SecurityBlue.
But Highmark says it isn't the bad guy. A company spokeswoman said even with the increase, Highmark will continue losing money for Medicare HMO products in Mercer and Crawford counties.
"In all of 1999 and 2000, for Mercer and Crawford counties, we lost $4.6 million in SecurityBlue, with most of the losses occurring in Mercer County,'' said Vanessa Paris. "We anticipate to continue significant losses.''
Here is a breakdown of planned prices and benefits:
Benefit changes in Standard have added new co-pays where none existed in the past. The co-pays are:
Seniors are getting socked with higher prices and fewer benefits due to lower reimbursements from the federal government, Ms. Paris said.
"We're getting reimbursement increases from the federal government of 2 percent, while medical costs are going up 8 percent,'' Ms. Paris said. "We keep losing money and losing money.''
She said nationwide insurers nationwide are ending their Medicare HMO products because they are posting huge losses.
"We're trying to stay in the market and not leave people without a choice,'' she said.
Mercer, Crawford and Erie counties have been designated as rural areas by the Centers for Medicare and Medicaid Services. That gives insurers a lower reimbursement rate on the philosophy that health care costs less than it does in metropolitan areas. Mercer and Crawford counties will continue to be labeled rural, although Erie County will get a metropolitan designation next year.
As a result, Erie County seniors will only see 16 percent rate hikes for both the Basic and Standard plans. Seniors there will pay $50 monthly for Basic and $85 for Standard. All co-pay changes in the Standard plan for Mercer County are also in store for Erie County.
A much starker contrast shows up with counties in and around Pittsburgh. For example, Lawrence County seniors will pay only $12 monthly for the Basic plan and $65 for the Standard plan. Also, the prescription quarterly limit for that county is $350, more than double the limit for Mercer County subscribers.
The disparity is due to federal reimbursements to insurers, Ms. Paris said. Highmark gets about 25 percent lower reimbursement in "rural" areas than it does around Allegheny County, she said.
"It's not a good situation, we're not arguing that it is,'' Ms. Paris said. "But it's better than pulling out of the market, which is happening throughout the nation.''
Highmark will hold town meetings at Howard Johnson motel in East Lackawannock Township at Interstate 80 and state Route 19 to answer questions and give further explanations on SecurityBlue rates and benefits. Meetings will be held at 10 a.m. and 1 p.m. on Nov. 1 and Nov. 6.
Highmark subscribers can reach the insurer by calling toll-free at: (800) 935-2583