Senate GOP looking at PPO plan in considering Medicare alternative

Monday, June 2nd 2003, 12:00 am

By: News On 6

WASHINGTON (AP) _ Senate Republicans are considering a plan for a new Medicare alternative that includes a $400 annual deductible and a $400 payment for each hospital admission, while including coverage for prescription drugs and protection against catastrophic health care costs, according to material circulating in Congress.
Seniors choosing the new option would also generally receive preventive health benefits without cost, according to the paper, which was obtained by The Associated Press and which officials described as highly preliminary. Seniors would have to enroll in President Bush's proposed Preferred Provider Organizations under Medicare to receive the coverage.
Bush and Congress hope to enact legislation this year that would give all seniors access to prescription drug coverage for the first time under Medicare. At the same time, the president is proposing creation of a managed care option, PPOs, for the 38-year-old government program. Beneficiaries could see any physician for their care, but would pay higher costs _ sometimes far higher _ if the doctor were outside the PPO network.
Advocates say that the private insurance market makes extensive use of PPOs, and that millions of Americans have grown comfortable with the care they receive from them.
The material provided no details on what the monthly premium would be for seniors enrolling in a Medicare PPO. Most beneficiaries pay no monthly premiums for hospital coverage, and those who enroll in so-called Part B Medicare, which provides non-hospital coverage, the premium is $58.70 a month.
Under traditional Medicare, according to the government's official website, seniors pay a $100 annual deductible to cover doctor visits, and 20 percent of a government-approved amount for services after that.
In addition, there is an $840 deductible for each hospital admission, and additional daily expenses for stays lasting longer than 60 days.
The traditional Medicare does not cover preventive care. Nor does it offer prescription drug coverage or catastrophic health care protection.
No details were available about the extent of the prescription drug care coverage that would be provided in the PPOs. Beneficiaries would receive protection against annual health care costs in excess of $6,000.
The Senate Finance Committee is expected to consider Medicare legislation next week, and Majority Leader Bill Frist, R-Tenn., has set aside the second half of June for floor debate.
Frist said during the day that after years of fruitless efforts, he believed the ``legislative stars are aligned'' for a bill to pass.
Senate Democratic Leader Tom Daschle of South Dakota said he, too, hopes a bill can pass, but in veiled terms, he urged Frist and the Republicans not to attempt to attempt to muscle legislation through. ``I hope that indeed we can send each other the clear message that we're not looking for a 51-vote solution,'' he said. ``We're looking for a 70 or 80 or 90 vote solution. We're looking for a compromise in this legislation that brings about a broad consensus.''
Republicans hold a 51 vote majority in the Senate, to 48 Democrats and one independent.
Frist and Daschle made their comments as the administration claimed that Bush's plan to offer a new managed care option would restrain government costs at the same time it provides better health care benefits for recipients.
Officials acknowledged they expect their assertion to be challenged by estimates that lawmakers will rely on in drafting Medicare prescription drug legislation over the next several weeks.
But Thomas Scully, head of Centers for Medicare and Medicaid Services, said an agency study put the savings at roughly $22 billion over a decade, and would ``drive people to better, more comprehensive plans.''
Scully did not release written cost estimates. But a study made public said, ``These savings would continue to grow over time. In addition, beneficiaries would receive better and more enhanced services including full coverage for preventive care.'' In contrast to the administration's claims, GOP aides in Congress say they expect the Congressional Budget Office to estimate that the president's new option would increase government costs. CBO itself has yet to release figures.
More than an accounting disagreement is involved.
Congress and the administration have set aside $400 billion over the next decade for creation of a new prescription drug benefit under Medicare. If Bush's plan for a new Medicare option results in higher government costs, less funds would be available for a stand-alone drug benefit for seniors who remain in traditional Medicare.
The administration's study was based on the results of 31 PPO Medicare demonstration projects established around the country in recent months. ``These data suggest that the most efficient plans have the potential to beat Medicare's costs by an average of 2.3 percent.
``Not all PPO plans in the demonstration are that efficient, however, which is why the specific design features matter greatly,'' it says.