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Seniors face big hikes for Blue Cross Medicare

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Thousands of seniors enrolled in Medicare plans through the state’s largest health insurer will see their monthly premiums jump by as much as one-third this year.

The increases for Medicare Advantage customers of Blue Cross Blue Shield of Massachusetts range from $10 a month to about $60 a month, depending on the plan. Blue Cross said it had to raise premiums to make up for a decline in federal reimbursements and to contend with the higher costs of medical care and prescription drugs.

Blue Cross also offers Medicare options that don’t require members to pay any premiums, and about 4,800 people are enrolled in these plans. But far more Blue Cross members, about 36,000, pay premiums for more comprehensive Medicare plans, and they will see steep increases. Their monthly rates will rise as much as 34 percent, far above the increases at other insurers.

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“Thirty-four percent is a very large increase,” said Mike Wallace, 64, a Framingham resident whose 65-year-old wife is enrolled in one of the Blue Cross plans. “It scares you to think if they’re raising it this much this year, how much is it going to be going up in the next several years?”

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Medicare is the federal health care program for Americans 65 and older. Seniors have the option of enrolling in Medicare Advantage plans, which usually charge premiums but include some additional benefits and limits on out-of-pocket spending.

The federal Centers for Medicare & Medicaid Services pay private health insurers for providing Medicare Advantage plans. The reimbursements are calculated each year according to a formula that accounts for how sick plan members are and where they live. According to that formula, Blue Cross said, it is set to receive less money from the federal government this year. The insurer also blamed rising premiums on the high costs of specialty medications, including new drugs to treat high cholesterol.

Ken Arruda, executive director of Medicare markets at Blue Cross, said the company’s Medicare plan rates were mostly stable before rising sharply in 2017. He said he realizes the increases may be difficult for some seniors to afford.

“We’ve introduced new plans that may be more affordable,” he said. “We make a diligent effort every year.”

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Blue Cross said members were notified about the rate increases in September, before the open enrollment period when they had the option to switch plans.

Premiums in Blue Cross’s most popular Medicare Advantage plan are rising to $79 a month from $59, a 34 percent increase. At the second-most popular plan, premiums are up to $235 a month from $180.50, a 30 percent increase.

The costs for Medicare Advantage plans offered by other insurers in Massachusetts are increasing more slowly, and some even slashed premiums, according to figures provided by Medicare officials. Tufts Health Plan is the largest provider of Medicare Advantage plans in the state, with about 100,000 members. Premiums for Tufts’ plans are rising 8 percent at most, though some of the increases are much smaller, according to the insurer.

Harvard Pilgrim Health Care, Fallon Health, UnitedHealthcare, and other insurers also offer plans.

About 32 percent of Americans on Medicare are enrolled in Medicare Advantage plans. That includes about 275,000 Massachusetts residents.

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Medicare officials, who approve the rates for Medicare Advantage plans, did not comment on the rate hikes at Blue Cross. A Medicare spokeswoman referred to a statement from September, which said the average monthly premium for these plans will decrease about 4 percent in 2017, and that the majority of Medicare Advantage enrollees will not see any increase in premiums.

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.