Average out-of-pocket health care costs for Medicare+Choice enrollees increase substantially in 2002.

A fter rapid government payment increases in the midto late 1990s, Medicare+Choice plans now face sharply reduced annual increases in government payments for basic Medicare benefits (Gold 2001a). In response, Medicare+Choice plans are cutting back on supplemental benefits and raising premiums (Gold and Achman 2001; Achman and Gold 2002a, 2002c).These changes have increased outof-pocket spending for health care by Medicare beneficiaries, especially by those who need the most care because of poor health (Achman and Gold 2002b). This issue brief updates to 2002 an earlier Commonwealth Fund report, Out-of-Pocket Health Care Expenses for Medicare HMO Beneficiaries: Estimates by Health Status, 1999–2001. That analysis found that out-ofpocket spending by Medicare+Choice enrollees can be substantial and varies significantly by health status (Achman and Gold 2002b). In 2001, for example, the average enrollee in good health spent $1,195 out-of-pocket on health care while an enrollee in poor health spent $3,578, or about three times as much. Our current analysis shows that out-of-pocket costs for an enrollee in good health will rise by 20 percent in 2002, to $1,429. Costs for an enrollee in poor health will rise by 34 percent, to $4,783. The analysis presented here uses the database Mathematica Policy Research, Inc. (MPR), created from Medicare Compare, a consumeroriented summary of benefits in Medicare+Choice plans.We licensed the methodology of HealthMetrix Research, Inc., which includes cost and The Commonwealth Fund is a private foundation supporting independent research on health and social issues.