Health care costs will rise dramatically next year for tens of thousands of elderly and disabled Washington area residents enrolled in Medicare HMOs.

The four area HMOs serving Medicare recipients will increase premiums or co-payments beginning Jan. 1, further evidence that managed care is not as much of a bargain as policymakers had hoped it would be.

For years HMOs have been wooing senior citizens away from standard Medicare coverage with promises of lower out-of-pocket expenses and extra benefits, such as prescription drugs. Now those advantages are eroding.

Kaiser Permanente's Medicare HMO plans to begin supplementing federal payments with annual premiums billed to members--$588 in Northern Virginia and $228 in Maryland and the District.

CareFirst BlueCross BlueShield will begin charging Medicare beneficiaries $600 a year in parts of the region where it now charges them nothing to join. United Healthcare of the Mid-Atlantic will begin assessing co-payments for hospital stays--$100 or $250 a day, depending on where a patient lives, up to $750 a year.

Cigna Corp. plans to reduce its annual benefit for brand-name prescription drugs to $400 from $600, with a new limit of $100 in any quarter. In Frederick County, Cigna is raising its annual premium from zero to $840.

Some HMOs say they are requiring members to dig deeper into their own pockets because the government is not paying them enough to care for Medicare beneficiaries--an assertion the government disputes.

United explained its changes in a recent letter to subscribers, saying "we must make adjustments so we can still deliver to you the comfort and security you expect. . . ." United said the payments it receives from Medicare "will increase only about two percent for the year 2000 while medical costs will increase much more than that."

Politicians have been trying to steer Medicare beneficiaries into managed care to control spending on the federal health insurance program. The latest round of changes in HMO coverage leaves Medicare beneficiaries with less reason to join HMOs--and more reason to study the fine print before choosing one for next year.

"What you are seeing in D.C. appears to be reflective of a national trend . . . toward more premiums, higher premiums, and more restricted benefits with higher cost sharing," said Tricia Neuman, who directs research on Medicare at the Henry J. Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

Managed care "isn't necessarily going to be the answer for the Medicare population . . . as it may not be the answer for the commercially insured younger population," Neuman added.

Medicare gives beneficiaries a choice of standard fee-for-service medical coverage or managed care. In either case, the government charges beneficiaries a monthly premium, which typically is $45.50 deducted from Social Security checks.

If beneficiaries take the standard coverage, Medicare helps pay medical bills, but only for a bundle of benefits defined by the government. For example, outpatient prescription drugs are excluded. To fill gaps in the standard coverage, beneficiaries may purchase supplemental "Medigap" insurance--but prices may be prohibitive, and after an open enrollment period insurers may turn down applicants.

If beneficiaries enroll in a managed care plan such as an HMO, the government pays the plan a monthly fee--for example, $607.74 per month this year for people age 65 and over in the District. The health plan has the option of collecting an additional monthly premium from the beneficiary. The HMOs typically restrict patients' access to specialists and limit their choice of physicians.

Michael Long, 66, a retired salesman in Lanham, said he will drop his CareFirst coverage rather than pay the new premium.

"It just makes me mad to see how a company will recruit seniors . . . convince them to join them, and then after one year just double, or better than double, the price," Long said. Long said he will take Medicare's standard fee-for-service coverage, and "if I get sick I'm going to go to any doctor I want to."

Kaiser, CareFirst, United and Cigna, with combined enrollment of about 87,000 people on Medicare, are the only HMOs serving Medicare in the Washington area.

Cigna, which this year began offering Medicare coverage in the Washington area, plans to stop enrolling additional Medicare beneficiaries Dec. 1, except for people who are just becoming eligible for the program, spokesman Howard Drescher said.

The choices available to Medicare beneficiaries in the Washington area dropped sharply in the beginning of 1999 when Aetna, NYLCare, Prudential and Mid Atlantic Medical Services exited the program. United stopped offering Medicare coverage in many Maryland counties on Jan. 1, and CareFirst is preparing to scale back.

To find the best value, consumers must look beyond premiums, said Leta Blank, director of Montgomery County's Senior Health Insurance Assistance Program, which gives free advice to Medicare beneficiaries.

For example, though United will continue to charge no supplemental premium, members could face a variety of new charges if they get sick, such as:

* $50 for ambulance service.

* $75 to $100 for each outpatient surgery.

* 20 percent of the cost of "durable medical equipment" such as wheelchairs.

* $50 per day for the 30th through 100th days spent in a skilled nursing facility.

* $500 for each mental health hospitalization.

* 10 percent of the cost of inpatient transplant services.

In addition, United is sharply raising prescription drug co-payments. For people in Montgomery and several other counties, the co-payment for a 90-day mail order supply of a brand-name drug will rise to $90 from $20.

Under Cigna's plan, the out-of-pocket co-payment for each visit to a medical specialist will quadruple, to $20 from $5.

Changes such as Cigna's cap on prescription coverage can pose hardships for senior citizens, Medicare experts said. Even at the current limit of $600, "a lot of folks meet that very quickly," said Daphne Van Tiem of the Prince William Area Agency on Aging. This year, one elderly Woodbridge woman exhausted her $600 annual allowance for brand-name drugs by the end of March, Van Tiem said.

Cigna has no cap for generic drugs, "but if a person can't take a generic drug then they are just out of luck," Van Tiem said.