"Nevertheless, it's apparent that a proposed Medicare drug benefit, which would not be fully implemented until 2006, should have no impact on our members since it will be voluntary and inferior to the drug coverage currently provided at the state and local levels. Therefore, they should not worry at all."

Even though a new plan would be voluntary, members may have heard concerns, raised in some circles, that employers could be tempted to eventually drop their drug coverage and push their retirees into a Medicare drug plan. These concerns are based, in part, upon the unfortunate fact that as healthcare costs continue to rise, more employers are cutting back on retiree medical benefits.

"Please be assured that this would not happen here to state and local retirees who must enroll in Medicare at age 65," explains Insurance Coordinator Cheryl Stillman. "That's because state law requires their combined benefits and coverages, under Medicare and supplement plans, be equivalent to those provided to them if they were under age 65."

Contained within both the Senate and House versions is a controversial measure, which could have more ominous implications for the future of Medicare, namely a new managed-care option for retirees. Private insurance companies would be invited to establish a series of regional preferred provider organizations (PPOs) that Medicare beneficiaries could join or instead remain in the existing fee-for service ("freedom of choice") coverage.

National groups, like the National Association of Retired Federal Employees, are concerned that so-called Medicare reformers, in attempting to contain the program's costs, may attempt to make a new PPO option more attractive, thereby undermining the traditional fee-for service program. Under a worst-case scenario, healthier Medicare beneficiaries would opt to join a cheaper and basic managed-care PPO, leaving a larger percentage of those with greater health care needs in the fee-for-service program.

Without the healthier beneficiaries, the costs under the traditional program would increase in the future, prompting the Congress to possibly reduce or drop the fee-for-service option. This would not be the Medicare program that our Association envisions for the future.

"It must be emphasized that without question, the current fee-for-service coverage under Parts A and B - so popular with our members - will continue as the central component of Medicare," states Stillman. "That being said, we must remain vigilant and defeat efforts, here and in Washington, to undermine traditional programs in order to eliminate the freedom of choice our members overwhelmingly prefer when making difficult medical decisions."