History of Medicare Advantage
The origins of Medicare Advantage, also known as Medicare Part C, are in the 1970s. Medicare is ever evolving. Let’s discuss the high level history of Medicare Advantage. The details are consistently redefined even today.
In a nutshell, the greater part of the 3 decades following the 1970s bring beneficiaries major changes.
Balanced Budget Act of 1997
The Balanced Budget Act of 1997 established the new Part C of Medicare – Medicare + Choice. Medicare Choice is an early version of what we know today as Medicare Advantage. Additionally, the Balanced Budget Act aimed to earn federal savings within the Medicaid system in three areas. The gross federal Medicaid savings comes from three sources: Repeal of minimum payment standards from hospitals, nursing homes, and community health centers.
History of Medicare Advantage – Medicare Modernization Act
In 2003, the Medicare Modernization Act passed. Medicare Part D, prescription drug coverage and benefits, are established. At this time, Medicare Choice Plans are officially renamed Medicare Advantage Plans. Before 2003, Medicare offered no prescription benefits or coverage. Because of this new coverage, beneficiaries can recently get all of their medical needs covered in one place, with one cohesive plan, and with one convenient ID card.
Privatized insurance companies begin to offer Medicare Advantage plans. These companies contract with the United States government to provide plans that fit strict guidelines. MAPDs typically cover the same benefits as Original Medicare, in addition to extra coverage including out-of-pocket maximums, some minimal dental coverage, some hearing coverage, and, in most cases, prescription drug coverage. Private insurance companies offer Medicare Advantage (MA) plans. Insurance carriers contract with the program. Medicare Advantage plans provide hospital, outpatient, and, usually, prescription drug coverage. These plans supplant benefits under Medicare parts A, B, and D. However, plans are risk-based plans. Advantage plans are not universal plans covered by the federal government. And, there is variation in the quality and quantity of benefits that purchasers receive. They are ubiquitous, though, with over 98% of beneficiaries having had access to privatized plans in 2017.
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