Medicare To Offer 33 PPO Plans In 2003

NU Online News Service, Aug. 27, 5:55 p.m. – The U.S. Department of Health and Human Services has persuaded health insurers to operate 33 Medicare preferred provider organization plans starting Jan. 1, 2003.

The new Medicare managed care PPOs will be available in 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 PPOs will be able to appeal to patients by offering prescription drug benefits and easy access to large networks of doctors and hospitals, but they will also be able to build in incentives for thrift by charging co-payments and deductibles similar to those charged by the commercial PPOs that serve patients under 65, HHS says.

HHS officials are hoping the new PPO demonstration program will help revive the Medicare+Choice managed care program, by reducing its dependence on tightly managed, difficult-to-underwrite health maintenance organizations.

“The under age 65 market is rapidly flocking toward PPO products, which give patients the flexibility they need,” Tom Scully, administrator of the Centers for Medicare & Medicaid Services, says in a statement about the new PPO program. “Seniors want the same options, and this is a big first step in getting them there.”

Private health insurers and insurance trade groups have been asking federal officials to open up the Medicare program to PPOs for years.

Even the American Association of Health Plans, Washington, a group that includes PPOs but is better known for representing HMOs, is praising the government’s new effort to work with PPOs.

“America’s health plans strongly support efforts to strengthen and expand Medicare+Choice,” AAHP Chief Executive Karen Ignagni says in a statement. “Beneficiaries are counting on Congress to do its part to strengthen this program for seniors in all parts of the country.”