Medicare Advantage Plans Cost More Than Fee-for-Service Program
Payments to Medicare Advantage plans on average exceed by 11% Medicare fee-for-service program costs among similar groups of beneficiaries, according to new Medicare Payment Advisory Commission analysis released on Tuesday by Rep. Pete Stark (D-Calif.), CQ HealthBeat reports (CQ HealthBeat, 6/7). In addition, according to the analysis, payments to MA plans in 2004 averaged 107% of Medicare fee-for-service program costs for beneficiaries in similar demographic groups and geographic regions (Stark release, 6/6).
The analysis was prepared at the request of congressional committees to update previous reports.
Stark said in a statement, "While working to enact the Medicare Modernization Act, Republicans crowed that adding Medicare Advantage plans to Medicare would save money through 'competition' and 'market efficiencies.'" He added that Congress should "enact legislation eliminating government overpayments to HMOs" and that "MA plans should be paid the same as traditional Medicare."
Mohit Ghose, a spokesperson for America's Health Insurance Plans, said that the analysis "greatly overestimates" the difference between payments to MA plans and fee-for-service program costs. Ghose added that MA plans reduce costs for Medicare and beneficiaries and provide more coverage than the Medicare fee-for-service program (CQ HealthBeat, 6/7).
The analysis is available online. Note: You must have Adobe Acrobat Reader to access the analysis.