Health Affairs May 10, 2018
Medicare beneficiaries have the option of receiving health coverage either through traditional Medicare or enrolling in a private Medicare Advantage (MA) health plan, which one-third of beneficiaries now do. Medicare paysMA plans a fixed monthly amount for each enrolled member, and MA plans assume full financial responsibility for providing all Medicare-covered benefits to their enrollees. We outline a proposal to reform the way that these fixed monthly payments to MA plans are determined, replacing the current, overly complex structure with one that would enhance competition, simplify beneficiary choice through standardization, and save an estimated $10 billion annually.
Currently, the fixed monthly amount that an MA plan receives is determined by a complicated set of rules and parameters, under which each...
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