Prior to the ACA the federal government paid Medicare Advantage plans (private i

Question

Prior to the ACA the federal government paid Medicare Advantage plans (private insurers that enroll Medicare beneficiaries) fees that were higher than what a Medicare beneficiary would cost in the traditional Medicare program (about 14% or $12 billion more per year). There are now 12 million Medicare beneficiaries enrolled in Medicare Advantage plans (24% of Medicare beneficiaries). The fees paid to insurers were determined by bids from the insurers and varied by county. The bids were measured against a benchmark rate that the government set each year. The benchmark rate increased either by 2% each year or by a rate equivalent to the overall growth rate in Medicare spending, whichever was greater (it never declined), The benchmark was also adjusted for factors such as Medicare enrollee's age and health problems (risk adjustment). Adjustments were also made to plans operating in rural areas, If the insurer's bid was higher than the benchmark (this rarely occurred) then Medicare beneficiaries who enrolled in that plan paid the difference, If the bid was below the benchmark then the plan kept 75% of the difference as a rebate. The plan was required to use the rebate to provide extra benefits (dental, vision, wellness care-benefits that those in the traditional Medicare program do not get), cut members' costs (such as reducing copays), or both. The government kept the other 25%. Please discuss the problems with process and provide possible solutions/alternatives to this payment arrangement. Please discuss the problems with this process and provide possible solutions/alternatives to this payment arrangement.

Explanation / Answer

may be this will help you... http://pages.uoregon.edu/rgp/PPPM613/class8a.htm

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