The continuing cost of privatization: extra payments to Medicare Advantage plans in 2008.
The Medicare Modernization Act of 2003 explicitly increased Medicare payments to private Medicare Advantage (MA) plans. As a result, every MA plan in the nation is paid more for its enrollees than they would have been expected to cost in traditional fee-for-service Medicare. The authors calculate that payments to MA plans in 2008 will be 12.4 percent greater than the corresponding costs in traditional Medicare-an average increase of $986 per MA plan enrollee, for a total of more than $8.5 billion. Over the five-year period 2004-2008, extra payments to MA plans are estimated to have totaled nearly $33 billion. Although Congress recently enacted modest reductions in MA plan payments, these changes will not take effect until 2010. Moreover, while the new legislation removes a few factors contributing to the extra payments, a number of other factors remain unaffected.
Biles
Brian
B
Department of Health Policy, School of Public Health and Health Services, The George Washington University, USA. bbiles@gwu.edu
Adrion
Emily
E
Guterman
Stuart
S
D018588:Fee-for-Service Plans / Q000191:economics; D005544:Forecasting; D006801:Humans; D006278:Medicare / Q000191:economics* / Q000639:trends; D017149:Private Sector; D011332:Privatization / Q000191:economics*; D013219:State Government; D014481:United States