Insurers expanding Medicare drug plans
Wednesday, March 30, 2005 | 11:01 a.m.
PacifiCare Health Systems Inc. today announced its intention to offer a prescription drug plan for seniors on traditional Medicare next year.
The Cypress, Calif.-based company has filed an intent to bid for prescription drug plan contracts in all of the 34 regions designated by the Centers for Medicare & Medicaid Services, PacifiCare spokeswoman Cheryl Randolph said.
CMS recently concluded the application process and will accept bids through June 6 from insurers that want to offer prescription drug coverage in 2006 when Medicare recipients gain drug coverage for the first time. The federal agency is scheduled to announce contract winners Sept. 14.
PacifiCare is the latest insurer to announce plans to expand its offerings for Medicare recipients. In Nevada, PacifiCare and Sierra Health Services Inc. offer private Medicare plans, which offer more benefits than traditional fee-for-service Medicare. The plans already offer prescription drug coverage and could expand their offerings next year.
"Secure Horizons probably won't see much of a change because most of the seniors already have prescription drug coverage," Randolph said. "They aren't going to have to go out and select all these different plans."
PacifiCare has also applied to offer private fee-for-service Medicare plans in 49 states, which would be similar to current Medicare plans that would be administered by PacifiCare.
PacifiCare plans to construct a new mail-order drug facility, which should be completed in mid-2006, the company said.
Secure Horizons, which is PacifiCare's private Medicare plan, operates in Nevada, California, Arizona, Oregon, Washington, Texas, Oklahoma and Colorado.
Sierra Health offers private Medicare plans in Nevada as Senior Dimensions, but plans to expand its offerings into Mohave, Maricopa and Pima counties in Arizona and to several counties in Utah. The plans offered in Arizona and Utah would be preferred-provider organizations and an application was submitted to offer similar plans in Nevada to complement its health-maintenance organization.
"Our Senior Dimensions members, we have always had a prescription drug benefit associated with that," said Shelley Cranley, Sierra's assistant vice president for government affairs. "We won't know until the rates come out from the federal government and everything is finalized, but we're optimistic that we don't anticipate any major changes."
The advantage to a private Medicare plan is that the member would have one company managing all health needs and claims, she said.
PPOs enable members to choose physicians inside or outside their networks and pay higher rates when they are outside the network, while HMOs have lower out-of-pocket costs, but members must stay in the provider network for coverage.
Sierra should know whether CMS approved its applications by late April and the plans would be effective in September, Cranley said.
"We have a long history working with the Medicare program -- 20 years as a matter of fact," Cranley said. "We reviewed the Medicare Modernization Act and all the opportunities that are available."
Las Vegas-based Sierra Health Services, which operates as Health Plan of Nevada and Sierra Health & Life, also has applied with CMS to offer standalone prescription benefits.
Sierra's application is to provide prescription drug coverage to traditional Medicare recipients in 8 regions, which comprises eight states that are mostly in the West, Cranley said.
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