New York City, June 25, 2003--As Congress debates Medicare proposals that would shift more beneficiaries into private insurance plans, legislators may first want to examine the often tumultuous history of the six-year-old Medicare+Choice program, Medicare's managed care alternative to its traditional fee-for-service program. According to a new policy brief from The Commonwealth Fund, many Medicare+Choice enrollees have been faced with a limited choice of plans in their area and instability in provider participation compared with fee-for-service Medicare, as well as significantly increased out-of-pocket costs--especially for those with chronic and disabling illnesses--and a confusing, complicated benefit structure.

"Seniors may suddenly find that their physician is no longer a member of their plan or, if they have health problems, that their out-of-pocket costs have increased substantially," said Karen Davis, president of The Commonwealth Fund. "These are the realities of the health care marketplace, and we should be cautious about inflicting them on the elderly and disabled."

The analysis, Lessons from Medicare+Choice for Medicare Reform, by Geraldine Dallek, an independent health policy consultant, and Brian Biles and Lauren Hersch Nicholas of George Washington University, provides seven lessons for the current debate:

Lesson #1: Private plans do not participate in many regions. Attracting private plans to some regions, particularly rural areas, has been difficult because of the small number of hospitals and physicians in these areas and their reluctance to contract with managed care plans. Only 13% of rural beneficiaries have an option of joining a Medicare+Choice plan.

Lesson #2: Premiums and benefits vary greatly by geographic area. Wide variation in premiums, benefits, and cost-sharing will undermine the promise of Medicare to provide the same health care benefits to beneficiaries no matter where they live.
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Contact: Mary Mahon
mm@cmwf.org
212-606-3853
Commonwealth Fund
25-Jun-2003


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