title: An economic history of Medicare part C.
abstract: BACKGROUND
  Twenty-five years ago, private insurance plans were introduced into the Medicare program with the stated dual aims of (1) giving beneficiaries a choice of health insurance plans beyond the fee-for-service Medicare program and (2) transferring to the Medicare program the efficiencies and cost savings achieved by managed care in the private sector.
  
  
  METHODS
  In this article we review the economic history of Medicare Part C, known today as Medicare Advantage, focusing on the impact of major changes in the program's structure and of plan payment methods on trends in the availability of private plans, plan enrollment, and Medicare spending. Additionally, we compare the experience of Medicare Advantage and of employer-sponsored health insurance with managed care over the same time period.
  
  
  RESULTS
  Beneficiaries' access to private plans has been inconsistent over the program's history, with higher plan payments resulting in greater choice and enrollment and vice versa. But Medicare Advantage generally has cost more than the traditional Medicare program, an overpayment that has increased in recent years.
  
  
  CONCLUSIONS
  Major changes in Medicare Advantage's payment rules are needed in order to simultaneously encourage the participation of private plans, the provision of high-quality care, and to save Medicare money.
authors.affiliation: Department of Health Care Policy, Harvard Medical School, 180 Longwood Avenue, Boston, MA 02115, USA. mcguire@hcp.med.harvard.edu
authors.forename: Thomas G
authors.initials: TG
authors.lastname: McGuire
authors.forename: Joseph P
authors.initials: JP
authors.lastname: Newhouse
authors.forename: Anna D
authors.initials: AD
authors.lastname: Sinaiko
mesh_terms: D018588:Fee-for-Service Plans / Q000191:economics* / Q000639:trends*; D005249:Fees and Charges / Q000639:trends*; D005382:Financing, Personal / Q000639:trends; D006264:Health Benefit Plans, Employee / Q000191:economics / Q000639:trends; D018166:Health Care Reform / Q000639:trends; D005102:Health Expenditures / Q000639:trends*; D006801:Humans; D015273:Insurance Selection Bias; D020398:Medicare Part C / Q000191:economics* / Q000639:trends*; D014481:United States