Blue Cross is cleared to offer premium-free Medicare HMO

January 06, 1996|By M. William Salganik | M. William Salganik,SUN STAFF

Blue Cross and Blue Shield of Maryland announced yesterday that it received approval from the Maryland Insurance Administration to offer a health maintenance organization plan for senior citizens with no monthly premium.

Blue Cross has been offering the Medicare HMO, called Medi-CareFirst, but at a premium of $25 per month. The plan has attracted only about 1,000 subscribers at that rate, compared with more than 90,000 seniors who have selected traditional "Medigap" insurance from Blue Cross.

HMOs are an alternative to Medigap policies, which are increasing in price. For the most popular Medigap plan offered by Blue Cross, called "65 Choice," rates for a 70-year-old went from $99.15 to $103.81 a month, effective Jan. 1.

Medigap policies cover the cost of deductibles, co-pays and services not ordinarily covered by Medicare, the federal health insurance program for people older than 65. Insurers offer a range of policies at different prices depending on whether they cover such benefits as prescription drugs or at-home recovery.

Medi-CareFirst includes coverage of prescriptions up to $1,000 a year, eye exams, dental care and other benefits not included in many Medigap policies. However, participants in Medi-CareFirst are restricted in choice of doctors; they are covered only for services received from plan doctors.

According to the state insurance agency, zero-premium Medicare HMOs also are offered in Maryland by Chesapeake Health Plan, HealthPlus, Humana and Optimum Choice.

With a Medicare HMO, the federal government pays the insurer a fixed fee per person based on the average Medicare claims in the region -- regardless of how much care the subscriber receives. The insurer assumes the risk if its costs are higher, but makes a profit if it can hold down costs.

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