A recent Medicare Advantage (MA) enrollment boom is largely due to employers using the program to cover their retirees, according to a recent Kaiser Family Foundation report, prepared by Avalere Health. Employers can contract with MA plans to provide Medicare and supplemental benefits to Medicare-eligible retirees. The report shows that employers are increasingly using private fee-for-service (PFFS) plans over other types of MA plans as an option for offering retiree health benefits.
Between 2006 and 2008, the number of Medicare beneficiaries enrolled in Medicare Advantage group plans increased to 1.7 million, from 900,000, and most of that growth came from growth in employer PFFS plan contracts.
Prospects for continued enrollment growth in the group PFFS market, however, are uncertain because of changes in Medicare Advantage payments and the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 signed into law in July that will require PFFS plans to create provider networks by 2011. See our article on MIPPA for more information.
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