The Cost of Privatization: Extra Payments to Medicare Advantage Plans: Updated and Revised

Authors

Brian Biles, George Washington University
Lauren Hersch Nicholas, George Washington University
Barbara S. Cooper, Commonwealth FundFollow
Emily Adrion, George Washington University
Stuart Guterman, Commonwealth Fund

Document Type

Report

Publication Date

11-2006

Keywords

Government Funding; Medicare

Abstract

The Medicare Modernization Act of 2003 sharply increased payments to private Medicare Advantage plans. As a result, every plan in every county in the nation was paid more in 2005 than its enrollees would have been expected to cost if they had been enrolled in traditional fee-for-service Medicare. The authors calculate that payments to Medicare Advantage plans averaged 12.4 percent more than costs in traditional Medicare during 2005: a total of more than $5.2 billion, or $922 for each of the 5.6 million Medicare enrollees in managed care. This issue brief updates an earlier analysis of Medicare Advantage payments in 2005 previously published by The Commonwealth Fund; the updated estimates in this report are based on final 2005 enrollment figures that were not available at the time the previous estimates were developed, and they include the effect of policy decisions that were not reflected in the previous estimates.

Comments

Funder: Commonwealth Fund.

APA Citation

Biles, B., Nicholas, L. H., Cooper, B. S., Adrion, E., & Guterman, S. (2006). The cost of privatization: Extra payments to Medicare Advantage plans: Updated and revised. New York: Commonwealth Fund.

Open Access

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