Bush’s plan to privatize Medicare encounters resistance

Sunday, March 23, 2003

March 24, 2003

WASHINGTON - As of March 1, fewer than 1% of eligible Medicare beneficiaries were participating in a Bush administration pilot program that allows them to enroll in preferred provider organizations, the Chicago Tribune reports.

In the pilot program's first three months, fewer than 57,000 of an eligible 11 million people have enrolled in a PPO. The fact that seniors have not embraced the pilot could be a setback for Bush health advisers, who saw the program expanding to cover even more of the nation's 40 million Medicare patients in health plans operated by private companies, the Tribune reported.

Seniors' apparent lack of enthusiasm stems in part from the fact that most PPOs do not offer coverage for the newest and most expensive prescription drugs, the Tribune reports. Most PPOs cover generic drugs, and only a small number cover brand-name medicines, the Tribune reported.

The program, unveiled by the Bush administration last August and in effect since January, gives seniors in 23 states greater access to PPOs through the Medicare+Choice program. Although few PPOs have participated in the program in the past, the administration offered 33 PPOs financial incentives and reduced their risk to convince them to participate in the program. Beneficiaries who choose to enroll in PPOs - which "allow a wide choice" of in-network providers and the ability to see an out-of-network doctor for an additional charge - pay a $60 to $80 monthly premium, compared with an average $54 monthly premium for coverage under both an M+C HMO and fee-for-service Medicare

CMS Administrator Tom Scully said, "The health plans need to do a better job of marketing because the only way you get people to switch is through a lot of marketing. In one county in New Jersey, the program is being marketed aggressively and it is going gangbusters, from zero to 44,000 [enrollees] in three months. I think it's going to be popular as people understand it."