Health Affairs, 27, no. 2 (2008): w156-w164 (Published online 4 March 2008) doi: 10.1377/hlthaff.27.2.w156 © 2008 by Project HOPE	New Online   How Would Obama, McCain Cover The Uninsured?   Debating Cost Of Uninsured   Try Medicare-For-All   HA Blog Top 10

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From Politics To Policy: A New Payment Approach In Medicare Advantage

While the Medicare Advantage program’s future remains contentious politically, the Medicare Payment Advisory Commission’s (MedPAC’s) recommended policy of financial neutrality at the local level between private plans and traditional Medicare ignores local market dynamics in important ways. An analysis correlating plan bids against traditional Medicare’s local spending levels likely would provide an alternative method of setting benchmarks, by producing a blend of local and national rates. A result would be that the rural and lower-cost urban "floor counties" would have benchmarks below currently inflated levels but above what financial neutrality at the local level—MedPAC’s approach—would produce.

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