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Medicare+Choice in New York City: So Far, So Good?


While withdrawals of managed care plans from Medicare+Choice have weakened the program in many regions of the country, New York City's five-year-old Medicare+Choice program continues to perform relatively well. Indeed, the 200,000 enrollees in the city enjoy a greater choice of M+C plans, lower monthly premiums, and more generous benefits than their counterparts in other major cities or even in New York suburbs. According to this new study, however, there are several signs that New Yorkers may soon face the ills that afflict the program nationally.

In the Commonwealth Fund field report Medicare+Choice in New York City: So Far, So Good?, health policy analysts Jennifer Stuber of the New York Academy of Medicine, and Andrew Dennington and Brian Biles, M.D., of George Washington University, chart major trends that threaten the viability of Medicare managed care in the city, including:

  • Medicare payment increases over the past few years--2 to 3 percent--have not kept pace with health care inflation, which has increased at more than double those rates.
  • Three of the five largest health plans in New York City--Aetna, Oxford Health Plans, and United Healthcare, all large, for-profit insurers--have withdrawn from Long Island as well as other major cities around the country.
  • New York physicians and hospitals are showing signs that they are less willing to accept reduced rates from, or even sign contracts with, Medicare HMOs.

New York City's Medicare+Choice program has been strengthened through high payments to plans and through the city's large pool of physicians and hospitals, thereby fostering competition. National trends indicate, however, that these strengths may not hold up much longer. According to the report, elderly and disabled Medicare HMO enrollees will likely soon feel the effects of large-scale health plan withdrawals, premium increases, benefit reductions, and instability in provider networks, as have beneficiaries in most other markets.

Facts and Figures

  • Although national enrollment in Medicare+Choice plans has declined 24 percent from its peak in 1999, enrollment in New York City is down only 7.4 percent from its peak.
  • New York City beneficiaries still have access to 10 Medicare+Choice plans, in stark contrast with those living on Long Island and in other metropolitan areas like Houston, Seattle, and Tucson. The number of Medicare HMOs operating on Long Island dropped from 11 to three after four consecutive years of large-scale health plan withdrawals.
  • Every Medicare+Choice plan in New York City except Aetna still offers a basic, zero-premium option with drug coverage. While nationally the average enrollment-weighted premium increased 53 percent from 2001 to 2002, to $33.14, the average premium in New York City remained low--only $2.51 in 2002.
  • New York City Medicare+Choice plans are beginning to follow national trends in benefit reductions. For example, HIP has dropped coverage of brand-name prescription drugs for its members in the borough of Queens.

Publication Details



Medicare+Choice in New York City: So Far, So Good?, Jennifer Stuber, Andrew Dennington, and Brian Biles, The Commonwealth Fund, September 2002