As part of President Obama’s plan to decrease government reimbursements to third parties in Medicare Advantage plans and cut wasteful government healthcare spending, the expected effect on the free market side of things will probably occur next year, as premium hikes for beneficiaries may go up $40 – $70.  Currently, the government pays 14 percent more for a beneficiary in a Medicare Advantage plan—which combines hospitalization, outpatient, and drug services into a single managed-care plan—than it does for a patient in traditional Medicare’s fee-for-service plan.

Obama’s long range goals may mean more pain in the short term for those who choose to go this route than for those enrolled in the traditional fee-for-service model. However, MA’s perceived benefits for certain “high value” services, like annual physicals and vision and hearing screens promote wellness and disease prevention — something for which traditional Medicare Part B plans can’t significantly reimburse (until someone is sick). Will less government reimbursement in MA plans provide enough cost sharing savings to fund a wasteful Medicare system or will higher premiums force beneficiaries out of MA plans, further burdening fee-for-service plans? | LINK

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