Displaced by Hurricane Katrina: Issues and Options for Medicare Beneficiaries

Identifies potential problems and offers options for assisting Medicare beneficiaries during the period following Hurricanes Katrina and Rita. Describes areas to be considered in future disaster planning efforts

Medicare Advantage Reforms: Comparing House and Senate Bills

Compares House and Senate approaches to reforming the Medicare Advantage payment system to reduce costs. Discusses geographic unit of payment, risk adjustments, quality management bonuses, and beneficiary protections and enrollment simplification

The Continuing Cost of Privatization: Extra Payments to Medicare Advantage Plans Jump to $11.4 Billion in 2009

Outlines the impact of the 2003 increase in payments to private Medicare Advantage plans, efforts to phase out extra payments in order to finance improvements for low-income beneficiaries, and alternative approaches to providing equitable coverage

Payments to Medicare Advantage Plans Exceed Fee-for-Service Costs: Options for Medicare Savings from 2007 through 2011

The Medicare Modernization Act of 2003 (MMA) and the Deficit Reduction Act (DRA) of 2005 include provision intended to increase the role of private health plans in Medicare. These provisions set Medicare Advantage plan payment rates at levels higher than average costs would be in tradition free-for-service Medicare in every county in the nation. The total amount of extra payments to Medicare Advantage plans resulting from these provisions is projected at $5.7 billion in 2007 and nearly$30 billion over the five year period, 2007 to 2011. This briefing paper outlines the specific MMA and DRA provisions that generate these extra payments and presents opportunities for revised policies that can reduce Medicare spending in excess of fee-for-service costs. The options explored here address the four bases for Medicare Advantage play extra payments: MMA statutory provisions, including county benchmark extra payment rates and Indirect Medical Education payments that increase the county benchmark rates; budget neutral risk adjustment payments; and payments from a regional PPA stabilization fund. In view of concerns about the Federal budget deficit of over $250 billion a year and other more short-term concerns facing Medicare, such as the cost savings needed to pay for a modification of the Sustainable Growth Rate (SGR) policies so that Medicare payments to physicians do not decline by 5 percent in 2007, reductions in extra payments to Medicare Advantage plans could provide substantial Medicare savings. Furthermore, reductions in extra payments to Medicare Advantage plans may be seen as appropriate, as these extra payments clearly run contrary to the oft-stated purpose of increasing the enrollment of beneficiaries in private plans: to lower total Medicare costs

Medicare Advantage Payment Provisions: Health Care and Education Affordability Reconciliation Act of 2010 H.R. 4872

The Health Care and Education Affordability Reconciliation Act of 2010 would make major changes to Medicare Advantage (MA) payment policies. Overall, payments to MA plans would be reduced from the current national average of 113 percent of local fee-for-service (FFS) costs to a new average of 101 percent of FFS costs. The Congressional Budget Office (CBO) has estimated that the new polices would reduce Medicare spending by $132 billion over 10 years. The new policies would set county payment benchmarks for MA plans at 115 percent, 107.5 percent, 100 percent, and 95 percent of local FFS costs depending of the relative level of FFS costs in the county. The MA plan rebate policy would be reduced from the current level of 75 percent. A new program of plan performance-based payments would increase benchmarks and rebates to plans with high performance scores. This issue brief presents analysis, using data from 2009, of the impact of these new policies on payments to private plans across the nation

Paying Medicare Private Plans by Competitive Bidding: Not the Same as Costs in Regular Medicare

Medicare Advantage plans are now paid $11 billion a year, and$150 billion over 10 years, more than costs in regular fee-for-service (FFS) Medicare. In the past two years there have been discussions about reducing MA payments to the level of 100 percent of average costs in FFS and using the savings to offset the costs of new Federal health initiatives such as health care reform. Earlier this year, OMB proposed reducing Medicare overpayments to private insurers through competitive payments. Under this proposal, MA plan payments would be based on an average of plans\u27 bids submitted to Medicare. This issue brief analyzes the new proposal using data on MA plan benchmarks, bids and rebates, and enrollment for 2009. Analysis of MA plan bids indicates that, while the national average of MA plan bids in the 3,140 counties in the US is 101 percent of FFS costs, the actual level of bids by plans in individual counties varies greatly. Under a bid-based MA payment system, plans would receive under payments - payments less than 100 percent of FFS – of $3.2 billion in approximately 800 counties. These under payments would be balanced with continued extra payments – payments greater than 100 percent of FFS - of$3.8 billion to plans in approximately 2,300 counties. Bid-based payments in eight states would average less than 100 percent FFS while in the other 42, the average would be greater than FFS costs. Most notably, bid-based payments in Florida would average 21 percent less than FFS costs, $2,200 per enrollee per year and a total of almost$2 billion a year. Bid-based payments in 11 states would continue to average more than $1,000 per enrollee per year over fee-for-service costs. Extra payments in both Oregon and Washington State would average 18 percent more than FFS costs and total$320 million a year in Oregon and $290 million in Washington

The Continuing Cost of Privatization: Extra Payments to Medicare Advantage Plans Jump to $11.4 Billion in 2009

The Medicare Modernization Act of 2003 explicitly increased Medicare payments to private Medicare Advantage (MA) plans. As a result, MA plans have, for the past six years, been paid more for their enrollees than they would be expected to cost in traditional fee-for-service Medicare. Payments to MA plans in 2009 are projected to be 13 percent greater than the corresponding costs in traditional Medicare—an average of $1,138 per MA plan enrollee, for a total of$11.4 billion. Although the extra payments are used to provide enrollees additional benefits, those benefits are not available to all beneficiaries—but they are financed by general program funds. If payments to MA plans were instead equal to the spending level under traditional Medicare, the more than $150 billion in savings over 10 years could be used to finance improved benefits for the low-income elderly and disabled, or for expanding health-insurance coverage

Paying Medicare Advantage Plans by a Blend-Based System: Where Are the Gains and Losses?

Medicare Advantage (MA) plans are now paid $11 billion a year and$150 billion over 10 years more than costs in fee-for-service (FFS) Medicare. In the past two years there have been discussions about reducing MA payments to the level of FFS costs and using the savings to offset the costs of new Federal initiatives such as health care reform. These discussions have included a number of options on the specific new approach to pay plans including: average FFS costs in each county; a blend of local county FFS costs and national FFS average costs; and a regional system based on FFS costs in multi-county regions. Setting MA payment equal to local county FFS costs would result in a national average of payments that is equal to FFS costs and eliminate extra payments to MA plans. The local/national blend option would pay plans nationwide an average of 99 percent of FFS costs. It would, however, leave plans in counties with FFS costs below the national average with extra payments of approximately 5 percent, while plans in counties with FFS costs above the national average would be paid as much at 10 percent less than FFS costs in the county. A regional payment system would provide MA plans in suburban counties with FFS costs lower than the regional average extra payments of 10 percent or more and pay plans in many core urban counties with FFS costs higher than the regional average up to 10 percent less than FFS costs in the county. Because MA plan enrollment rates are higher in the core counties than the suburban counties, the overall effect of a regional blend payment system would be to reduce the national average of MA payments to less than 100 percent of FFS costs

Paying Medicare Advantage by Competitive Bidding: How Much Competition Is There?

Examines the distribution of enrollees among Medicare Advantage (MA) plans and the level of competition insurers face. Considers the feasibility of eliminating extra payments to MA plans and implementing competitive bidding to finance healthcare reform