One of California's largest HMOs has decided to raise Medicare premiums to beneficiaries and slash pharmacy benefits.
Health Net, the California HMO unit of Woodland Hills, Calif.-based Foundation Health Systems, is imposing or increasing premiums for its Seniority Plus Medicare risk plan in 13 California counties, effective Jan. 1.
The change will affect nearly 57,000 of the HMO's more than 151,000 Medicare managed-care enrollees in primarily urban areas of the state.
In seven of the counties, enrollees haven't paid premiums for their Medicare HMO coverage.
In the remaining six counties, enrollees will pay higher premiums, ranging from $15 to more than $70 per month.
In 11 other counties where Health Net offers Seniority Plus Medicare, enrollees have not paid premiums and will continue not paying.
In all 24 counties, Health Net is slashing pharmacy benefits by varying amounts. For example, in Sacramento County, the pharmacy benefit will shrink to $1,000 from $1,800 per year.
Pharmacy costs are increasing at double-digit rates nationwide, and "the drug benefits of the past are not sustainable," said Mike Myers, vice president of Medicare operations and sales at Health Net.
This summer, Health Net decided to yank its Seniority Plus plan from 10 largely rural Northern California counties, also effective Jan. 1. The pullout, which will affect 7,500 enrollees, is just one of many by HMOs nationwide. The departing plans blamed low reimbursement and high medical costs for their decisions.
Seniority Plus expects to see "some disenrollment" because of the premium and benefit changes, Myers said, but he declined to make projections.