Health Affairs

Posting date: November 28, 2001

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Health Affairs, 10.1377/hlthaff.w1.65
Copyright © 2003 by Project HOPE

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Medicare+Choice: Doubling Or Disappearing?

Robert A. Berenson ^1*

¹ Robert Berenson is senior advisor at the Academy for Health Services Research and Health Policy and adjunct professor at the University of North Carolina School of Public Health and the Duke University Fuqua School of Business.

^*Corresponding author.

Abstract

Although the changes in the program created by the Balanced Budget Act are often viewed as the reason for the current instability in the Medicare+Choice (M+C) program, in fact, health plans are having difficulties in all of their markets, not just in Medicare. It may be time to reconsider the purpose of the program and to fundamentally redesign how payments are made to managed care organizations contracting with Medicare. Two alternative approaches are suggested: treating M+C like another provider type by severing the payment linkage to spending under traditional Medicare, and overhauling the program by creating a value-based purchasing orientation rewarding plans that provide higher-quality care to beneficiaries with chronic diseases.

Key Words: Health Reform, Managed Care--Medicare, Medicare

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