Leveling the Playing Field in Medicare

eAlert 52d6b0c8-5365-4798-9a60-b921c3a2d96c

Payments to private Medicare Advantage plans have exceeded Medicare fee-for-service costs ever since Congress increased them in 2003. According to a new Commonwealth Fund <a href="/publications/issue-briefs/2011/mar/medicare-advantage-era-health-reform-progress-leveling-playing">issue brief</a>, in 2010, payments to such plans exceeded average costs in fee-for-service Medicare nationally by 8.9 percent—for a total of $8.9 billion. While this amount is substantial, it represents a decrease relative to 2009, when Medicare Advantage payments were 13 percent, or $11.4 billion, greater than fee-for-service costs. <br /><br />The analysis, prepared by George Washington University researchers, provides a baseline for measuring the impact of the health reform legislation on Medicare Advantage. Under the Affordable Care Act, payments to Medicare Advantage plans will be reduced beginning in 2012, to be more in line with those in fee-for-service Medicare. The health reform law will also, for the first time, reward Medicare Advantage plans that achieve higher quality performance scores with higher payments. <br />