Washington ? The Bush administration is putting the finishing touches on a proposal that would fundamentally redefine Medicare, creating a prescription drug benefit and offering it to patients who are willing to join a new version of the program that relies on managed care, sources said Thursday.

The plan, the centerpiece of the president’s domestic agenda this year along with a new round of tax cuts, is aimed at slowing the growth of Medicare costs in coming decades by attracting patients into what administration officials hope will be a less expensive system dominated by health maintenance organizations and other private health plans.

The proposal will not compel any older American to leave traditional fee-for-service Medicare and join a private plan.

But it will contain a variety of popular features — including the drug coverage and a new provision to cover catastrophic medical costs — that are intended as powerful inducements for patients to switch.

According to sources inside and outside the administration, the plan would be phased in through a period of years, and 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.

In the meantime, President Bush plans to recommend an interim drug benefit that would focus on assistance for elderly people with low incomes.

The administration still is trying to calculate how much the proposal will cost, but recent estimates have hovered near $350 billion in the next decade.

That would be far more than the $190 billion the president has allotted to Medicare revisions in his past budgets — but less than some members of Congress in both political parties believe is needed for the drug benefits alone.