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Save dough on HMO
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May 10, 2000: 11:54 p.m. ET
Consumer Reports study encourages seniors to shop around for health care
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NEW YORK (CNNfn) - Careful shopping can help senior citizens save hundreds of dollars in health insurance costs, according to a study released Wednesday by Consumer Reports.
That was one of the findings of the consumer publication's report, which rated the value of 273 Medicare HMO's and 559 supplemental  insurance plans available in 30 cities. The study follows up on a September 1998 report that found the country's 39 million Medicare beneficiaries faced a wide variety of choices to help fill in gaps in Medicare coverage.
"Contrary to what many predicted two years ago," said Trudy Lieberman, director for the Center of Consumer Health Choices at Consumers Union, "we found a robust market for seniors in many major cities. By careful shopping, consumers can save hundreds of dollars in their individual HMO and Medicare supplement choices."
Large Price Differences
As in 1998, the survey found large price differences for the same policy sold by insurance carriers in the same city. In Chicago, for example, a 65-year-old could pay as little as $764 per year or as much as $1,472 for a similar attained-age Plan C policy, a supplement that provides a reasonable level of benefits. Similarly, a 75-year-old could pay between $1,049 and $1,934.
The survey also found the same kind of price differences in premiums for polices offering prescription drug benefits. For example, premiums for Plan I, which pays for half of a policyholder's prescription drugs up to an annual limit of $1,240 after a $250 deductible, ranged from $1,212 to $5,721.
While buying a policy with drug coverage may be expensive, Consumer Reports said seniors should consider this if they can afford the premiums and they can pass the insurers' health requirements.
Among the report's other key findings were:
v Of the HMO plans for which Consumer Reports could make a direct comparison with its 1998 results, 62 percent have kept premiums steady, 33 percent have increased them, and five percent now charge less.
v Medicare-supplement policies are a good choice for seniors who put a high value on choosing any doctor or hospital they want, and who can afford the premiums for a good plan.
v Medicare HMOs remain a good choice for people who need help paying for prescription drugs. 
v Though community-rated policies may be the best choice in the long run because premiums don't rise as the policyholder ages, few of them are available.
v Almost half of the HMO plans rated this year still charge no monthly premium. For those that do, the premiums on average run about $55. In some cities, some HMOs have stopped selling zero-premium plans.
v Many HMO plans offer a tiered pricing arrangement for prescriptions, where beneficiaries may pay a lower co-payment for generic drugs, a somewhat higher co-payment for preferred brand-name drugs and a much higher co-payment for very expensive brand-name drugs or prescriptions for which there is a generic equivalent.
v HMO annual premiums average $328 compared with $1,250 for a Medicare supplement Plan C policy for a 65-year-old. With an HMO, seniors are more likely to get some prescription drug coverage although it may be more limited than in the past. Twenty-two percent of the plans that were rated offer no prescription drug coverage, compared with about 17 percent two years ago. Fewer than 10 percent currently offer unlimited benefits. Some plans limit the annual expenditures for medications to $250.
The study's findings will be posted on the Consumer Reports Online Web site and a summary of the report appears in the June issue of Consumer Reports, which is available May 16. 
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Consumer Reports
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