title: The continuing cost of privatization: extra payments to Medicare Advantage plans jump to $11.4 billion in 2009.
abstract: The Medicare Modernization Act of 2003 explicitly increased Medicare payments to private Medicare Advantage (MA) plans. As a result, MA plans have, for the past six years, been paid more for their enrollees than they would be expected to cost in traditional fee-for-service Medicare. Payments to MA plans in 2009 are projected to be 13 percent greater than the corresponding costs in traditional Medicare--an average of $1,138 per MA plan enrollee, for a total of $11.4 billion. Although the extra payments are used to provide enrollees additional benefits, those benefits are not available to all beneficiaries-- but they are financed by general program funds. If payments to MA plans were instead equal to the spending level under traditional Medicare, the more than $150 billion in savings over 10 years could be used to finance improved benefits for the low-income elderly and disabled, or for expanding health-insurance coverage.
authors.affiliation: Department of Health Policy, School of Public Health and Health Services, The George Washington University, USA. bbiles@gwu.edu
authors.forename: Brian
authors.initials: B
authors.lastname: Biles
authors.forename: Jonah
authors.initials: J
authors.lastname: Pozen
authors.forename: Stuart
authors.initials: S
authors.lastname: Guterman
mesh_terms: D004501:Education, Medical / Q000191:economics; D005544:Forecasting; D006801:Humans; D007349:Insurance, Health, Reimbursement / Q000191:economics* / Q000706:statistics & numerical data / Q000639:trends; D008329:Managed Care Programs / Q000191:economics* / Q000706:statistics & numerical data / Q000639:trends; D006278:Medicare / Q000191:economics* / Q000706:statistics & numerical data / Q000639:trends; D011332:Privatization / Q000191:economics*; D011445:Prospective Payment System / Q000191:economics* / Q000706:statistics & numerical data / Q000639:trends; D011907:Rate Setting and Review / Q000379:methods*; D014481:United States