| FOR IMMEDIATE RELEASE Tuesday, August 27, 2002 |
Contact: | CMS Public Affairs (202) 690-6145 |
"This program gives seniors new options for their Medicare coverage similar to that available in the private insurance market," Secretary Thompson said. "Greater access and more choices in health care are key goals of the Bush Administration's plan to improve and strengthen Medicare. President Bush and I are committed to giving seniors additional and better benefit options, as well as access to affordable prescription drugs. Our plan will make that possible for an increased number of Americans."
The 33 PPO plans will be part of a new Medicare demonstration program that more closely mirrors the preferred provider type of coverage popular in the private sector but previously unavailable to Medicare beneficiaries. The demonstration program is a big step toward making these plans widely available to seniors and may permit hundreds of thousands of seniors to get more affordable drug coverage.
Enrollees will have more flexibility than is available through existing Medicare HMOs, but will still enjoy richer benefits than those available in the original Medicare program. Beneficiaries will be able to enroll in these new plans beginning in November, the Medicare health plan open enrollment period, with coverage beginning Jan. 1, 2003.
The new PPO option will be available to about 11 million Medicare beneficiaries - 30 percent of all seniors - in parts or all 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.
In addition to announcing the new demonstration projects, HHS also announced that it will improve the Medicare SELECT program by permitting physicians and suppliers under contract with Medicare SELECT insurers to waive Part B cost-sharing amounts. This will encourage Medicare SELECT insurers to expand their provider networks to include more physicians and suppliers, as well as hospitals.
Medicare SELECT is a form of supplemental insurance that generally offers beneficiaries lower premiums or increased benefits provided they use the Medicare SELECT plan's network of providers. It is also anticipated that some Medicare SELECT policies may use cost savings to help pay for additional benefits, such as prescription drug coverage. Under the proposed expansion, beneficiaries who purchase a Medicare SELECT plan would be able to choose from a network of hospitals, doctors, and suppliers who contract with the Medicare SELECT plan.
Until now, Medicare beneficiaries generally could only choose between two models of care - fee-for-service coverage or a closed network HMO - while many Americans under 65 are choosing PPOs, which blend the two approaches.
The demonstration plans will be considered Medicare+Choice plans and must offer all of Medicare's required benefits, but will also have the flexibility to offer greater access to drug benefits and disease management services. Most important, they will offer beneficiaries a wider choice of health care providers than is currently offered in HMOs.
Many Medicare beneficiaries are expected to choose the PPO option as a way to obtain prescription drug coverage and as an alternative to supplemental insurance plans, which often do not cover drugs and, when they do, can be prohibitively expensive for many seniors.
The cost sharing features of the plans (copayments and deductibles) vary according to which health care providers are selected. Medicare beneficiaries can weigh these costs against the benefits and provider choices available in picking a plan - just as Americans under 65 do.
"The Administration is driving to improve Medicare any way we can, by developing new and better health plan options, including prescription drug coverage," Centers for Medicare & Medicaid Services Administrator Tom Scully said. "The under age 65 market is rapidly flocking toward PPO products, which give patients the flexibility they need. Seniors want the same options and this is a big first step in getting them there."
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