A new report from The Commonwealth Fund shows that private Medicare Advantage (MA) plans will be paid an average of 12.4 percent more per enrollee in 2008 than providers in traditional Medicare fee-for-service programs. Extra payments to MA plans will amount to $986 over fee-for-service costs for each of about 8.7 million Medicare beneficiaries enrolled in Medicare Advantage plans, for a total of more than $8.5 billion in 2008. In 2004, MA plans received an average of $795 in extra payments, or a total of $3.9 billion. The extra payments were mandated by the Medicare Modernization Act of 2003 as an incentive to expand the role of private plans in Medicare and reduce growth in Medicare spending.
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