Medicare to Offer Some Beneficiaries PPO Option Next Year

In an effort to revitalize its faltering Medicare managed care program, the Bush administration has announced a three-year program to allow Medicare beneficiaries in 23 states to enroll in preferred provider organizations (PPOs). PPOs are a relatively unrestrictive form of managed care that encourages patients to choose doctors from a specified list, but allows them to visit other physicians for a higher price.

Under the program, which will start in January, PPO plans will be available through 33 private insurance companies operating 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. The administration estimates that the PPO option will be available to about 11 million Medicare beneficiaries'”30 percent of all beneficiaries.

Participating PPOs agree to cover all services available under traditional Medicare and may choose to provide additional coverage, such as prescription drug benefits. The administration says that all 33 PPOs intend to include some kind of prescription drug coverage in their plans. Those choosing the PPO option will pay between $6 and $26 over and above their regular Medicare Part B monthly premium.

Gail Shearer, director of health policy analysis at Consumers Union, was critical of the PPO drug offerings, saying, "There is simply no substitute for providing a prescription drug benefit for seniors. This plan dances around it. It provides enriched benefits for some but leaves many with nothing."

The Washington Post reports that the PPO plan 'is part of a broad administration strategy to tilt the government''s vast health insurance system for the elderly toward the private sector.'

But Amanda McCloskey, director of health policy at the consumer group Families USA, said that the government should not be "putting more energy into private programs when our experience has been that hasn''t worked."

To read the Washington Post article, go to:

To purchase an Aug. 28 article on the PPO plan in the Los Angeles Times, go to: