MEDICARE: Insurer Tests Fee-For-Service Plan
Consumer groups and insurers are closely watching Chicago-based Sterling Life Insurance, the first insurer to offer a fee-for-service plan to its Medicare patients as an alternative to traditional Medicare and HMOs. Like Medicare, patients are not restricted in their physician choices. But unlike the traditional federal program, enrollees of this new option will pay a $10 co-payment for office visits. The plan includes a $300 deductible for hospital stays and does not cover prescription drugs. Beginning July 1, the fee-for-service option will be available in 17 states: Alaska, Idaho, Kentucky, Minnesota, Nebraska, New Mexico, Nevada, Oregon, South Dakota, Tennessee, Utah, Arkansas, Louisiana, Mississippi, Ohio, Texas and West Virginia. Sterling says it hopes to gain market shares in a field not dominated by HMOs and argues that its $55 monthly premium is less expensive than traditional Medicare accompanied by MediGap policies. Consumer advocates and insurers are waiting to see whether the new system can attract patients and offer more services without going in the red. Diane Archer of the Medicare Rights Center said, "The bottom line is, will people on Medicare get the care they need when they need it? Only time will tell" (Appleby, USA Today, 5/9).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.