The Obama Administration announced changes for next year’s Medicare Advantage program aimed at reducing cost to participants and simplifying the choices facing consumers. President Obama criticized the Advantage program frequently as a candidate, and wants to use up to $177 billion in savings from the program to fund broader health care reform measures.

The changes will affect insurance companies that want to bid on Medicare insurance business for 2010.

One change consumers will notice and likely appreciate: 27 percent of current Advantage plans will be eliminated as part of an effort to make it easier for consumers to analyze and compare offerings. Most of the plans to be eliminated have fewer than 10 people enrolled.

Here’s how the Wall Street Journal described the changes:

Administration officials said the changes are intended to weed out certain out-of-pocket costs charged by Medicare Advantage, the private version of the federal health-insurance program for the elderly. Medicare Advantage plans, they said, will face more government scrutiny if they don’t cap a patient’s annual out-of-pocket costs at $3,400 or less, or if they charge patients more than traditional Medicare does for dialysis, home health care and other services. If the government deems the charges too high, insurers will be asked to scale them back.

The changes to Medicare Advantage reflect a broader plan by the Administration and Congressional Democrats to reel in privatization of Medicare. For example, one legislative proposal calls for creation of a government-sponsored prescription drug plan to compete with current private Medicare Part D plans.

Related posts:

1. Obama pledges reform on Social Security, Medicare
2. New: Guide to Medicare Advantage and Part D plans
3. How to navigate the Medicare D, Advantage enrollment maze
4. Cost-saving Medicare Part D reforms may be on the way
5. Government-sponsored long-term care plan advances in health bill

Tags | Medicare