title: Payment policy and competition in the Medicare+Choice program.
abstract: Over the last 2 years, Medicare+Choice (M+C) plans raised premiums and reduced benefits to an unprecedented degree, arguing that these were unavoidable consequences of inadequate payments. We investigate plan premium and benefit decisions, taking advantage of a natural experiment to separate the influences of payment rates, the intensity of interplan competition, and the underlying cost of providing coverage. We find that the effects of competition are comparable in importance to the effects of payment rates, confirming empirically that it is possible for the Medicare Program to improve benefits without increasing spending or shifting additional costs to beneficiaries.
authors.affiliation: Boston University, Department of Veterans Affairs, Abt Associates Inc., USA. pizer@bu.edu
authors.forename: Steven D
authors.initials: SD
authors.lastname: Pizer
authors.forename: Austin B
authors.initials: AB
authors.lastname: Frakt
mesh_terms: D000368:Aged; D004465:Economic Competition; D005249:Fees and Charges / Q000639:trends*; D006279:Health Maintenance Organizations / Q000191:economics* / Q000458:organization & administration / Q000706:statistics & numerical data; D006291:Health Policy; D006801:Humans; D007349:Insurance, Health, Reimbursement / Q000639:trends; D020398:Medicare Part C / Q000191:economics* / Q000458:organization & administration / Q000706:statistics & numerical data; D011907:Rate Setting and Review; D012424:Rural Population; D014505:Urban Population