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Payments To Medicare Advantage Plans Exceed Fee-For-Service Costs: Options For Medicare Savings From 2007 Through 2011, Brian Biles, Emily Adrion

Health Policy and Management Faculty Publications

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 …