*This is an archive page. The links are no longer being updated. 
1991.09.20 :  Medicare -- Medigap Coverage

Contact:  Bob Hardy (202) 245-6145
September 20, 1991

       Fifteen states have been designated by HHS Secretary Louis
W. Sullivan, M.D., to begin a program that could reduce the costs
of Medigap coverage for consumers who use preferred provider
organizations or health maintenance organizations.
       The designated states are Alabama, Arizona, California,
Florida, Indiana, Kentucky, Michigan, Minnesota, Missouri, North
Dakota, Ohio, Oregon, Texas, Washington and Wisconsin.
       Those states will be able to offer the Medigap preferred
provider and HMO option, known as Medicare SELECT, if by July 30,
1992, they establish Medigap regulatory programs that meet the
requirements of the Omnibus Budget Reconciliation Act of 1990.
       The term "Medigap" describes health plans that pay the
beneficiaries' share of costs, such as deductibles and
coinsurance payments, for Medicare-covered services.
       Secretary Sullivan said, "The preferred provider or HMO
feature should enable Medicare beneficiaries to purchase Medicare
SELECT policies for premiums lower than those charged for regular
Medigap coverage."
       Medicare SELECT plans will enter into agreements with
providers that agree to assure appropriate utilization and
deliver cost-efficient and high-quality care.
        The states designated to begin the Medicare SELECT
program were chosen because they have effective Medigap
regulatory programs, have insurers and HMOs interested in
offering Medicare SELECT products and meet other criteria for
consumer protection.
       Gail R. Wilensky, Ph.D., who directs the Medicare program
as administrator of the Health Care Financing Administration,
said that additional states "appeared to be good candidates for
Medicare SELECT, but the law allows the secretary to designate
only 15 states.
        "We ultimately want this coordinated care option to be
available to all Medicare beneficiaries," she said. "We believe
Medicare SELECT has the potential for offering the best values in
Medigap coverage."
        Except for emergencies, Medicare SELECT policies
generally will provide full Medigap benefits only when
beneficiaries use plan networks of providers. Emergency health
care services will be covered by Medicare SELECT even when
furnished by other providers.  Use of providers outside a plan's
network has no impact on regular Medicare benefits, which are
unaffected.

                            #   #   #