THE MEDICARE ACT OF 2003
INCREASES PAYMENTS TO MEDICARE+CHOICE PLANS


CMS announced late Friday, January 16, 2004, that, as a result of the Medicare Reform Act of 2003, payments to Medicare+Choice (now called Medicare Advantage) plans will increase, on average, 10.6% as of March 1, 2004. In addition to reducing beneficiary premiums or co-payments or increasing benefits, private plans may use the additional funds to increase payments to providers, or save the funds for the future. In December 2000, when Congress increased payments to plans effective March 1, 2001, many plans reserved the increased payments or increased payments to providers, rather than improve the benefits they offered their enrollees.

In contrast, the new Act requires all beneficiaries, even those who do not enroll in the prescription drug benefit, to pay 10% more for the Part B deductible, starting in 2005. While payments to private health plans will continue to increase each year, the Part B deductible also will increase, meaning that beneficiaries will pay more out-of-pocket for their health care.


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