Health Insurance Info
HHS Expands Health Plan Options in Medicare+Choice
Washington, DC, August 27, 2002 - HHS Secretary Tommy G. Thompson announced today that the Bush Administration
has approved additional health plan options for people with Medicare. A
total of 33 new health plans in 23 states will begin to serve Medicare
beneficiaries in January as part of a demonstration program modeled after
the preferred provider organization (PPO) coverage available to the vast
majority of Americans under age 65.
"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."
For a complete listing of all PPO health plans, please contact CMS Public Affairs at (202) 690-6145.
Contact:
CMS Public Affairs, (202) 690-6145