Extra Payments to Private Medicare Plans Could Be Used to Improve Coverage

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<p>For several years, the Medicare program has spent more to enroll beneficiaries in private managed care plans than it otherwise would have paid to cover those same beneficiaries in the traditional fee-for-service program. Today, The Commonwealth Fund released new data showing that in 2005, these extra payments amounted to 12.4 percent more on average per enrollee.<br><br>In <a href="/cnlib/pub/enews_clickthrough.htm?enews_item_id=25515&return_url=http%3A%2F%2Fwww%2Ecmwf%2Eorg%2Fpublications%2Fpublications%5Fshow%2Ehtm%3Fdoc%5Fid%3D428546%26%23doc428546">The Cost of Privatization: Extra Payments to Medicare Advantage Plans--Updated and Revised,</a> researchers at George Washington University and the Fund estimate that extra payments to Medicare Advantage plans last year totaled more than $5.2 billion. The higher payments were mandated by Congress to expand the role of private plans in Medicare.<br><br>The authors point out that this money could instead be used to improve Medicare coverage. Among other things, it could help fill in the coverage gap, or doughnut hole, in the prescription drug benefit, or reduce the increase in the Part B premium in 2007 by about $10 per month for each beneficiary.</p>