By Laura Meckler, Associated Press Writer (Tuesday, August 27, 2002; 8:43 PM)
WASHINGTON –– Older Americans in many parts of the country soon will have a new option in Medicare: managed care plans that offer prescription drug coverage and are more flexible than HMOs, much like those chosen by many people under age 65.
Under an experimental plan announced Tuesday, up to 11 million Medicare participants in 23 states can sign up for preferred provider organizations, where coverage is cheap as long as patients use doctors and hospitals that are on the insurance company’s list. Unlike health maintenance organizations, PPOs allow subscribers to visit doctors outside the network, but they have to pay extra.
All 33 health plans participating in the program intend to offer prescription drug coverage, federal officials said. The traditional Medicare program, where patients can see any doctor they want, has never offered drug coverage outside of hospitals. So older people who want coverage have been forced to buy expensive supplementary coverage or join HMOs.
Officials hope the new plans prove both popular with seniors and financially viable for insurance companies, who have pulled out of the Medicare HMO program in droves. Health and Human Services Secretary Tommy Thompson noted that nearly half of all Americans under age 65 are in PPOs.
“If this is so popular with Americans under 65, we should provide the same choices for our seniors,” he said.
Congress has been debating how to add prescription drug coverage to Medicare so that all participants can get help with their drug bills. Disagreements over how to structure the program and how much to spend have tied up the issue, and no bill is expected to pass this year.
Many seniors signed up for HMOs to get drug coverage, but those plans have complained that they didn’t get enough money to cover participants and many have dropped out. About 12 percent of Medicare participants remain in HMOs now.
Under the pilot program announced Tuesday, plans agree to offer coverage for at least three years. They will typically be paid more per enrollee than health plans offering HMOs are paid. If spending on participants winds up being significantly higher or significantly lower, the loss or the savings will be shared with the federal government.
Seniors can sign up for the new plans beginning in November, with coverage starting on Jan. 1.
The option will be available to about 11 million Medicare participants, although federal officials have no idea how many will sign up. Plans intend to offer PPOs in all or parts of 23 states: Alabama, Arizona, California, Florida, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Missouri, North Carolina, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Virginia, West Virginia and Washington.
© 2002 The Associated Press