Kaiser Permanente is preparing to raise premiums by as much as 76 percent for the 25,000 members of its Medicare HMO in the Baltimore-Washington area.
The largest increase will affect elderly and disabled residents of the District and Prince George's County, whose monthly premiums in a new Kaiser Medicare plan will jump from $79 this year to $139 next year, according to a letter the HMO plans to send members today. The new plan fixes premiums at $139 a month throughout the region. The old plan charged variable rates: $89 in Baltimore, $99 in suburban Maryland and $119 in Northern Virginia.
Co-payments for hospital admissions and brand-name prescription drugs also will rise sharply.
"These premiums will be unaffordable for many people," said Suzanne H. Jackson, director of the health insurance counseling center at George Washington University. "We will be hearing from a lot of concerned, frustrated and angry people."
Rep. Benjamin L. Cardin (D-Md.), who represents the Baltimore area, called the new rates "terrible, hard to defend" and said, "They're just charging more and giving their seniors less."
Mary K. Woods, a spokeswoman for Kaiser Permanente of the Mid-Atlantic States, confirmed the new rates and said they "reflect the actual cost of care." Health-care costs have been rising nationally by 10 to 12 percent, insurance executives say.
The rate hikes come two months after Rockville-based Kaiser announced it would be dropping Senior Advantage, its federally funded "Medicare+Choice" plan, and automatically enrolling members in a government-funded "Medicare Cost" plan, which Kaiser calls Medicare Plus.
Like many HMOs, Kaiser said it can no longer afford to participate in Medicare+Choice because of inadequate reimbursement from the government. About 200,000 Medicare beneficiaries across the United States will be dropped next year by their HMOs, according to the American Association of Health Plans, a trade group.
Kaiser is the last Washington area HMO to participate in Medicare+Choice, which was introduced in 1997 in hopes of reducing federal health spending while offering benefits, such as prescription-drug coverage, not provided by traditional Medicare.
The new plan will offer benefits similar to Medicare+Choice, including prescription coverage. Co-payments for generic drugs will not change, and there will be unlimited coverage for generics.
But co-pays for a 30-day supply of brand-name drugs will rise from $30 to $40 for mail order, $35 to $45 for each prescription filled at a Kaiser pharmacy and $45 to $55 for medications bought at participating non-Kaiser pharmacies. A $1,000 annual limit remains in place for these drugs.
Inpatient hospital care will carry a $500 co-pay for all admissions within a 60-day period -- up from $300 for each admission this year.
Under the new plan, members who fail to make a co-payment at the time of service will be billed $10 in addition to the co-pay.
Medicare Plus members also can see doctors outside the Kaiser network. But out-of-network visits will be covered under traditional Medicare, which reimburses patients 80 percent of the cost, Woods said.
Under federal law, Medicare enrollees dropped by a Medicare+Choice plan are guaranteed enrollment in one of four "medigap" plans, none of which offers prescription drug coverage. Kaiser's Medicare+Choice members must withdraw from Medicare Plus by March 4 if they want to be guaranteed enrollment in one of these medigap plans, Woods said.
Kaiser has not ruled out returning to Medicare+Choice, Woods said, "but only if the government's level of reimbursement changes."