Lessons from Medicare+Choice for Medicare Reform

Medicare has a long history with private health plans, most importantly the 1997 creation of the Medicare+Choice (M+C) program. The objectives of M+C included expanding the types of plans available to Medicare beneficiaries, increasing payments to plans in low-cost areas, and fostering competition among private plans. HMOs have left the M+C program in large numbers. Although many private M+C plans perform well compared with fee-for-service Medicare on selected preventive health measures, on other measures—including access to care, stability of providers, simplicity of benefit structure, and costs to the Medicare program—the history of M+C is less positive.