from Medicare that is to be used to finance HC reform will come from Medicare Advantage.

Medicare will see enrollment grow from 46 million to 79 million in the next two decades when the baby boomers move from private insurance to Medicare.

One would think that most savings from MA plans, fraud and improvement from efficiencies remain in the Medicare plan to help with the expected rise in enrollment.



http://www.commonwealthfund.org/Content/Ne...

"...The Congressional Budget Office estimates that bringing MA payments in line with traditional fee-for-service Medicare would save $157 billion over the next 10 years. Recent steps taken by the Centers for Medicare and Medicaid Services that reduce the payments made to private MA plans in 2010 do not address the factors responsible for the $11.4 billion in extra payments, the authors say.

The authors note that funds saved by eliminating extra payments to private plans could be used for other purposes, such as offsetting the costs of Medicare policy improvements—including reducing the Part B premiums that Medicare beneficiaries pay or increasing eligibility for low-income subsidies in Medicare Part D—or offsetting part of the cost of expanding health insurance to the 47 million uninsured..."


http://www.commonwealthfund.org/Content/Pu...


"Overview


The Medicare Modernization Act of 2003 explicitly increased Medicare payments to private Medicare Advantage (MA) plans. As a result, every MA plan in the nation is paid more for its enrollees than they would have been expected to cost in traditional fee-for-service Medicare. The authors calculate that payments to MA plans in 2008 will be 12.4 percent greater than the corresponding costs in traditional Medicare—an average increase of $986 per MA plan enrollee, for a total of more than $8.5 billion. Over the five-year period 2004–2008, extra payments to MA plans are estimated to have totaled nearly $33 billion. Although Congress recently enacted modest reductions in MA plan payments, these changes will not take effect until 2010. Moreover, while the new legislation removes a few factors contributing to the extra payments, a number of other factors remain unaffected."



http://www.medpac.gov/documents/MedPAC_Pay...

"The Medicare Advantage (MA) program
allows Medicare beneficiaries to receive
their Medicare benefits from private
plans rather than from the traditional
fee-for-service (FFS) program. Under
some MA plans, beneficiaries may receive
additional benefits beyond those offered
under traditional Medicare and may pay
additional premiums for them. Medicare
pays plans a capitated rate for the 22
percent of beneficiaries enrolled in MA
plans in 2008. These payments amounted
to $78 billion in 2007, 18 percent of total
Medicare spending..."


http://familiesusa.org/assets/pdfs/medicar...

"...According to the Medicare Payment Advisory
Commission (MedPAC), Medicare Advantage plans are paid an average of 12 percent more
than traditional Medicare to provide the same care. MedPAC estimates that the resulting
overpayments will add up to $54 billion over five years and $149 billion over 10 years.
The task of correcting these overpayments to Medicare Advantage plans has taken on extra
urgency this year. One reason is that Congress, which must reauthorize the State Children’s
Health Insurance Program (SCHIP), is considering extending SCHIP coverage to all eligible but
unenrolled children. This expansion of coverage would require about $50 billion in new funding.
Although there are several options for coming up with this additional funding, reducing overpayments
to Medicare Advantage plans could deliver a substantial share of the funds necessary
to expand SCHIP to eligible children. The funds saved by reducing these overpayments could
also be used to improve Medicare coverage for low-income seniors by strengthening Medicare
Savings Programs and the Part D low-income subsidy..."