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Top Federal Insurance Official Touts Medicare Partnerships With Private Insurers As UPMC Health Plan Announces Expanded Coverage Area For Medicare+Choice Product

PITTSBURGH, January 25, 2002 — UPMC Health Plan's announcement of an expanded service area for its Medicare HMO, UPMC for Life, could not have drawn a more interested observer.

Thomas A. Scully, administrator of the Federal Government's Centers for Medicare & Medicaid Services (CMS), participated in a news briefing where he described the importance of the Federal government in partnering with private insurers as the Health Plan rolled out its latest benefit product for those in the Pittsburgh region that are eligible for Medicare.

The world's largest health insurance organization, CMS is responsible for $1 out of every $3 spent on health care in this country and provides regulatory oversight of health benefits companies that sell Medicare HMOs. An estimated 40 million Americans are Medicare beneficiaries.

Pittsburghers and other Allegheny County residents can enroll in UPMC for Life beginning February 8, 2002, along with persons in Westmoreland, Washington, Beaver, Butler, and Armstrong counties. Coverage will take effect on March 1, 2002. An estimated 440,000 people are eligible. All beneficiaries with Medicare Parts A and B may apply.

In recent Congressional testimony, Scully said that Medicare+Choice plans are valuable because they traditionally improve on fee-for-service benefits by offering programs and covering services that are not covered under original Medicare. He said that these can include prescription drugs, routine vision care, dental care and lower co-payments.

"By making these services and benefits available," Scully said in his testimony, "Medicare+Choice plans provide a valuable alternative to fee-for-service Medicare and Medigap, whose out-of-pocket costs are often much higher for beneficiaries."

UPMC Health Plan is expanding its offering of UPMC for Life at a time when many insurers are abandoning Medicare HMO beneficiaries, according to Patricia A. Liebman, UPMC Health Plan Chief Executive Officer.

"Offering consumers an additional choice among health benefits insurers and products is what built our business," Liebman said.

UPMC Health System Executive Vice President John W. Paul said that while rising medical and pharmaceutical costs make premium setting difficult, we can't ignore the fact that

competition has fueled the success of our insurance subsidiary while keeping healthcare insurance costs reasonable for all.

"We are eager to offer our health benefits insurance to senior citizens and other eligibles in greater Pittsburgh so that they have access to top-notch health care through the UPMC Health System network at an affordable price," Paul said.

UPMC for Life will cost $58 per month with a prescription drug benefit and $9 without prescriptions in the six-county area.

"Enrollees will find UPMC for Life rates competitive with other insurers but our plan has added benefits such as the option to self-refer with a higher co-payment to network specialists," said Liebman.

Allegheny County has the second highest concentration of people over 65 years of age in the country, according to Census Bureau data. It is second only to Dade County, Florida. Western Pennsylvania may be home to the oldest population in the nation.

In 2001, UPMC for Life was offered for the first time in seven other western Pennsylvania counties where rates will remain the same in 2002. Cambria, Fayette, and Lawrence eligibles can get UPMC for Life for $45 with a drug benefit and no charge without. In Bedford, Blair, and Somerset rates are $45 with the drug benefit and $19 without. In Mercer, the cost is $69 with and $39 without. Medicare reimbursements from CMS to health benefits insurers vary by county and are determined by costs of medical care and prescription drugs in that locale.

UPMC Health Plan is the nation's fourth fastest-growing health benefits company, providing enhanced-access HMO and other health benefits products to some 368,000 persons. Headquartered in Pittsburgh, the Health Plan is a subsidiary of UPMC Health System, which has 31 merged and affiliated hospitals throughout western Pennsylvania. UPMC Health Plan members, in all lines of business, are served by some 6600 physicians in partnership with 80 hospitals in 23 western Pennsylvania counties.

Plan information is available by calling the UPMC for Life Medicare Sales Department at 1-877-381-3765 on Monday through Friday from 8:00 a.m. to 5:00 p.m. For the hearing impaired, call the TDD number at 1-800-361-2629 during that time.

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