The value of Medicare HMOs to consumers has declined sharply in almost all parts of California, according to the third annual Guide to California Medicare HMOs, a free report for consumers released today by the California HealthCare Foundation and Consumers Union.
The guide rated each Medicare HMO in California for overall value on a scale of one to five stars. Statewide, only 11% of HMOs received four or five stars for 2003, compared to 18% last year and 44% in 2001. In just two years the number of top ranked plans has dropped 86% in California.
The guide also rated the drug benefits of all HMOs offering prescription coverage, using the same one- to five-star scale. It found that HMOs are increasingly likely to offer some kind of prescription drug coverage, but that coverage is less generous than ever before.
This year, 95% of HMOs offer prescription drug coverage, a substantial increase from 65% in 2001. However, 68% of drug plans offered this year received only one or two stars, up from 24% in 2001 and 45% in 2002. Also, for the first time in the guide's three-year history, no HMO received a five-star rating for overall prescription drug value.
In addition to the value ratings, the guide provides important details about each Medicare HMO, including information about premiums, copayments, financial solvency, and quality of care (as measured by the Centers for Medicare and Medicaid Services, the government agency that administers the Medicare program).
"In the end, the value of a plan really depends on a person's needs and preferences. Consumers need to decide what's most important to them, and use the Guide to California Medicare HMOs to help them find the best match," said Trudy Lieberman, director of Consumers Union's Center for Consumer Health Choices. "For example, if seniors are most interested in drug benefits, they can look for the plan with the highest score for prescription drug coverage. If their income is limited, a plan with low premiums might be the best option."
Medicare HMOs are currently offered in 33 California counties. Where plans are available, seniors may select an HMO instead of traditional Medicare. Medicare HMOs generally offer more benefits than traditional Medicare, but they may limit their members' choice of providers and require referrals to get care from specialists. Four million Medicare beneficiaries live in California and approximately one-third of them are currently enrolled in Medicare HMOs.
"In past years, most California seniors had outstanding HMO options to choose from. Now HMOs are charging higher costs and providing fewer benefits. Medicare HMOs are a less attractive option than ever before," said Ann Monroe, director of the California HealthCare Foundation's Quality Initiative. "It's bad news for consumers looking for ways to stretch their Medicare benefits."
An interactive version of the report is available online through the link below. Consumers may download the guide from the Web sites or order free printed copies.
About the Consumers Union Ratings
Consumers Union assigned ratings to all Medicare HMO plans offered in California on a scale of one to five stars. Ratings were determined by measuring the total benefits provided to plan members and subtracting the amounts they pay for premiums and copayments. More details about the study's methodology are published in the guide.
About the California HealthCare Foundation's Quality Initiative
Serving as a catalyst to improve the overall quality of health care in California, the Foundation's Quality Initiative partners with objective, credible organizations to develop and disseminate information to California consumers about quality of care. By involving consumers and their representative organizations in the quality discussion, the Quality Initiative hopes to accelerate quality improvement, public accountability, and informed health care decision making.
About Consumers Union
Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving only consumers. It is a comprehensive source for unbiased advice about products and services, personal finance, health and nutrition, and other consumer concerns. Its ratings may not be used for commercial purposes. For more information on Consumers Union, visit www.consumerreports.org.
About the Consumers Union Center for Consumer Health Choices
The Center for Consumer Health Choices exists to illuminate imperatives for change in the health care system, to equip consumers and other stakeholders to participate in dialogue and debate concerning health policy and to enable consumer choice by providing evaluations of insurers, providers, and products to drive quality improvements in health care.
Note: CalMedicareHMOs.org was discontinued in 2004.