Medicare managed care: Past, present, and future

Medicare managed care enrollment has mushroomed in the past few years, tripling from 1993 to 1997. The payment rates have allowed plans to offer valuable extra benefits to beneficiaries at little or no additional cost; employers have provided inducements for their retirees to enroll; and many of the new Medicare beneficiaries are already in managed care plans when they enter the program. The Balanced Budget Act of 1997 and other factors could cause enrollment trends to change in either direction. More kinds of plans, including physician service organizations and preferred provider organizations, may be more attractive; new educational efforts may make more beneficiaries aware of managed care plans; and employers may continue to move their retirees into managed care. On the other hand, lower than expected Medicare payment rates to the plans may reduce the additional benefits they offer; consumer dissatisfaction with managed care is growing; and employers are dropping retiree benefits altogether. The future of Medicare managed care is hard to predict.