Medicare HMOs are struggling with low payment rates and increased patient demands, but an overwhelming majority believe in the long-term profitability of Medicare, according to a new report from InterStudy Publications in Minneapolis. Based on responses from 219 HMOs, the data shows that 87% are retaining or even expanding Medicare service areas. They are looking to expand in areas where payment rates are thought to be high enough and adequate provider networks are in place to handle Medicare enrollees. Top reasons for withdrawing from the Medicare program in 1999 were increased costs of prescription drug coverage, low payment rates and increased utilization.
The survey also showed great variations in the premiums and pharmacy expenses for Medicare enrollees.
See publication for the following charts: