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New Study Finds That Bush Administration Plan to Privatize Medicare Would Limit Seniors’ Choice of Doctors

June 5, 2003

New Study Finds That Bush Administration Plan to Privatize Medicare Would Limit Seniors’ Choice of Doctors


Data from Maine, Oregon, Utah, Vermont and West Virginia Show That Most Medicare Doctors Do Not Participate in Private Insurance Plans

WASHINGTON, D.C. – A proposal being pushed by the Bush administration and its allies in Congress to encourage Medicare beneficiaries to enroll in private insurance plans for prescription drug coverage would severely restrict those patients’ choice of doctors, a new Public Citizen study finds. The report looked at the effects such a proposal would have in Maine, Oregon, Utah, Vermont and West Virginia.

The traditional fee-for-service Medicare system allows seniors to see doctors of their choice, which has made beneficiaries reluctant to enroll in private insurance plans that might reduce their choice of doctors. To overcome that reluctance, the administration and Senate Majority Leader Bill Frist (R-Tenn.) want to offer significant prescription drug coverage only to those willing to join private plans (either PPOs or HMOs). They see the Federal Employees Health Benefits Program (FEHBP) as the model for reforming the Medicare program.

In each of the five states, Public Citizen’s study looked at the number of doctors in four counties participating in the Medicare program and examined how many of those doctors participate in FEHBP’s preferred provider organizations (PPO).

The report found that most doctors participating in traditional Medicare do not participate in the PPO plans offered through the FEHBP. In the 20 counties studied, less than half the Medicare general physicians were in the Blue Cross and Blue Shield PPO, the private plan with the most Medicare doctors. Fifty-two percent of Medicare cardiologists and a fourth of Medicare oncologists were in the Blue Cross and Blue Shield plan.

“Being able to choose a doctor is extremely important to seniors, and this study shows that the Bush administration’s plan would really place beneficiaries between a rock and a hard place,” said Ben Peck, legislative representative with Public Citizen’s Congress Watch. “If this plan were to pass, many seniors would be forced to choose between staying with their doctors and paying more for prescription drug coverage, or switching to new doctors just to receive coverage.”

PPOs offer patients some coverage for doctors who are not a part of their networks, but enrollees must contend with more paperwork and must pay more – sometimes significantly more – to see out-of-network doctors. According to the Congressional Research Service, FEHBP enrollees who see out-of-network doctors often do not even know how much it will cost to see their doctor until they receive a bill.

The counties included in the study are Franklin, Waldo, Oxford and Penobscot in Maine; Harney, Wasco, Polk and Marion in Oregon; Wayne, Emery, Sanpete and Weber in Utah; Lamoille, Caledonia, Windham and Rutland in Vermont; and Pendleton, Taylor, Jackson and Harrison in West Virginia. The counties were chosen because they were representative of populations throughout the states.

U.S. Sens. John Rockefeller (D-W.Va.) and Debbie Stabenow (D-Mich.) joined Public Citizen at the press conference to release the report. Marilyn Moon, senior fellow at the Urban Institute and former Medicare trustee, also participated.

“Once again, America’s health care system has reached a crossroads. Public Citizen’s latest report provides more evidence that Medicare privatization is not the right path for America’s seniors,” Rockefeller said. “Our seniors shouldn’t be forced to choose between a doctor they trust and prescription drugs. They deserve both, and Congress must update and enhance the services offered under Medicare to include an affordable, accessible prescription drug benefit.”

In addition to those states included in the report, Michiganprovides another excellent example of how any attempt to privatize a Medicare prescription drug benefit is a failed option, Stabenow said.

“Even in those areas in Michigan where HMOs have sought to team Medicare coverage with private prescription drug plans – and that’s only in nine of the state’s 83 counties – more than 35,000 seniors have been dropped from such plans,” Stabenow said. “Seniors by a 9-to-1 ratio prefer traditional Medicare to private plans, and a prescription drug benefit for seniors should be offered only through Medicare.”

The report finds that:

  • In the 20 counties surveyed, 1,422 generalist physicians participate in the traditional Medicare program. Just 43 percent of these generalists participate with Blue Cross and Blue Shield, the private plan with the most Medicare participating doctors. At least 75 percent of Medicare doctors do not participate in the six smaller private plans.
  • Of the 118 Medicare cardiologists in the 20 counties, just 61 (52 percent) are a part of the Blue Cross and Blue Shield plan. At least 69 percent of Medicare cardiologists do not participate in the six smaller plans.
  • In the 20 counties, there were 89 oncologists participating in Medicare, 75 percent of whom are not in the private Blue Cross and Blue Shield network. At least 82 percent of Medicare oncologists do not participate in the six smaller plans.

“Prescription drug coverage should be available through the traditional Medicare program,” said Frank Clemente, director of Public Citizen’s Congress Watch. “It shouldn’t be a carrot to lure seniors into private insurance plans. The Medicare program should not be turned over to the private insurance industry.”

Click here to view the report