Paying More Fairly for Medicare Capitated Care

The 1997 Balanced Budget Act (Public Law 105-33) not only balanced the federal budget for the first time in decades but also mandated major changes in Medicare. One important goal of these changes was to expand the choice of health plans for Medicare beneficiaries, both to encourage the provision of high-quality care and to control aggregate program costs through competition and risk sharing. Under the new provisions, health-plan options include traditional fee-for-service care, high-deductible medical savings accounts, provider-sponsored organizations, and capitated plans, such as health maintenance organizations. However, questions arose about whether all beneficiaries would have these choices. In particular, . . .