Medicare Advantage — Lessons for Medicare’s Future

Nejm.org: Marsha Gold, Sc.D., March 29, 2012.

Medicare faces tough challenges as the United States struggles with rapidly increasing health care costs. Medicare’s expenditures continue to rise, and its eligibility rolls are growing as the population ages. One proposed solution is to expand the use of private plans and market competition to constrain costs, perhaps even converting the current Medicare Advantage program (and Medicare) into a “premium-support” or “voucher” plan that sets a fixed contribution for use in purchasing private insurance coverage.1 In the face of a heated debate, it’s useful to consider what we can learn from Medicare’s 30-year experience with voluntary private-plan enrollment. Now known as Medicare Advantage, this alternative to traditional Medicare coverage materialized first through health maintenance organizations (HMOs) and more recently through less managed plans. As of February 2012, 29% of beneficiaries were enrolled in Medicare Advantage plans (including 37% of those enrolling in Medicare Part D for prescription-drug coverage). What lessons for current Medicare policy can be gleaned from the history of these plans?2.  Read more