Medicare beneficiaries who want prescription drug coverage would have to join some type of government-subsidized private health insurance program under a proposal being considered by the Bush administration, officials said Friday.

The plan is similar to a Republican proposal passed by the House last year and debated by the Senate, said officials who are working on the plan with President Bush.

It would allow current recipients and those close to retirement to remain in the traditional fee-for-service Medicare program, but it would include inducements for them to join a private plan.

Those perks would include prescription drug coverage and a new provision covering catastrophic medical costs. The plan, first reported by The Washington Post and The New York Times, is not final, officials said.

Sen. Edward Kennedy, D-Mass., immediately blasted the plan as "an outrageous attempt to force senior citizens to give up their family doctor and join HMOs."

And working from the same talking points, House Democratic Whip Steny Hoyer, D-Md., called it a "transparent attempt to escape from the GOP's promise to provide real prescription drug coverage for seniors."

Bush plans to devote a section of his State of the Union speech Tuesday to health care, and will outline the principles of his Medicare and prescription drug plans Wednesday in Michigan.

But final details of the package won't be nailed down next week, officials said.

Without providing specifics, White House press secretary Ari Fleischer said the president will make "it a top priority to create a modernized Medicare that includes prescription drug coverage for seniors and that will have a variety of options, a variety of choices."

Bush "believes that seniors deserve more choices and more options in their health care plans," Fleischer said.

According to The New York Times, no prescription drug coverage will be offered in the traditional fee-for-service Medicare program.

More than 85 percent of the 40 million Medicare beneficiaries are in that program.

Bush's proposal aims to slow the skyrocketing costs of Medicare by attracting patients into what administration officials hope will be a less expensive system dominated by health maintenance organizations and other private health plans.

Medicare beneficiaries would have three options -- the existing fee-for-service benefits, HMOs with drug benefits and private plans offering "enhanced fee-for-service benefits," according to the Times report in Friday's editions.

The plan would be phased in over several years and would perhaps take effect at different times in various parts of the country, depending on how successful the government is at persuading private health plans to take part, the Post said.

Administration officials estimated the drug benefits would cost $388 billion over 10 years, the Times reported.

Private health plans would bid each year, detailing a price they would charge for a package of goods and services covered by Medicare. The government would choose three of the lowest bidders in each of 10 geographic regions, the Times said.