Reading list

Why States Are So Miffed about Medicaid — Economics, Politics, and the “Woodwork Effect”, by Benjamin D. Sommers and Arnold M. Epstein (NEJM)

Managed Competition for Medicare? Sobering Lessons from the Netherlands, by Kieke G.H. Okma, Theodore R. Marmor, and Jonathan Oberlander (NEJM)

Advancing Health Care Equity through Improved Data Collection, by Joel S. Weissman and Romana Hasnain-Wynia (NEJM)

The ER, 50 Years On, Arthur L. Kellermann and Ricardo Martinez (NEJM)

The Waits That Matter, by John Maa (NEJM)

Winning Their Trust, by Anand K. Parekh (NEJM)

An Economic History of Medicare Part C, by Thomas McGuire, Joseph Newhouse, and Anna Sinaiko (Milbank Quarterly)

Context: Twenty-five years ago, private insurance plans were introduced into the Medicare program with the stated dual aims of (1) giving beneficiaries a choice of health insurance plans beyond the fee-for-service Medicare program and (2) transferring to the Medicare program the efficiencies and cost savings achieved by managed care in the private sector.

Methods: In this article we review the economic history of Medicare Part C, known today as Medicare Advantage, focusing on the impact of major changes in the program’s structure and of plan payment methods on trends in the availability of private plans, plan enrollment, and Medicare spending. Additionally, we compare the experience of Medicare Advantage and of employer-sponsored health insurance with managed care over the same time period.

Findings: Beneficiaries’ access to private plans has been inconsistent over the program’s history, with higher plan payments resulting in greater choice and enrollment and vice versa. But Medicare Advantage generally has cost more than the traditional Medicare program, an overpayment that has increased in recent years.

Conclusions: Major changes in Medicare Advantage’s payment rules are needed in order to simultaneously encourage the participation of private plans, the provision of high-quality care, and to save Medicare money.


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