Through its grantmaking, The Commonwealth Fund has examined the impact of private plans on Medicare beneficiaries' access to care and out-of-pocket costs. Fund-supported researchers have documented the enormous variation in out-of-pocket costs for beneficiaries who choose various private Medicare plans—information that has been cited by members of Congress in their communications with the Secretary of Health and Human Services.
(7) George Washington University's Brian Biles, M.D., and colleagues estimated that annual out-of-pocket spending for Medicare Advantage enrollees in poor health range from less than $1,400 to more than $7,500.
(8)(8) Speaking at a Fund-sponsored Alliance for Health Reform briefing, the study's authors recommended permitting beneficiaries to switch plans with 30 days'
notice, making Medicare Advantage benefit packages more standardized, and better protecting enrollees from high out-of-pocket costs.
Additional research by Biles and his team found that private Medicare Advantage plans received payments from the government in 2005 that exceeded expected fee-for-service payments for the same enrollees by an estimated $5.2 billion.
(9) Armed with this evidence, both Democrats and Republicans have developed proposals to redirect some of this money to fund other policy initiatives, such as improvements in beneficiary coverage or deficit reduction. Already deep into the next phase of Fund-sponsored research, the research team is exploring geographic variations in Medicare Advantage benefit packages and their relationship to plan payment rates, with a focus on new special-needs plans, which target specific groups of enrollees (e.g., Medicare/Medicaid "dual eligibles" and beneficiaries with certain chronic conditions), and private fee-for-service plans, which provide the traditional Medicare benefit package through private plans.
