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Medicare Advantage menu shrinks

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Medicare Advantage cost control measures will cut the number of plans on the menu in 2014.

Analysts at Avalere Health are reporting that the total number of plans available to program users will fall 5.3 percent, to 2,522.

The number of health maintenance organization (HMO) plans will rise 2.6 percent, to 1,715, but the number of preferred provider organization (PPO) plans will fall 17 percent, to 591.

The number of private fee-for-service plans will fall 33 percent, to 120.

The Medicare Advantage program – an initiative that resembles the public exchange program that the Patient Protection and Affordable Care Act (PPACA) is creating – gives private organizations a chance to offer Medicare enrollees an alternative to traditional Medicare coverage.

Supporters say the program offers enrollees better, more comprehensive coverage than the traditional Medicare program with lower out-of-pocket costs.

Critics argue that the program has ended up costing more than traditional Medicare, rather than less, as supporters had originally promised.

Centers for Medicare and Medicaid Services has developed a quality bonus program that is supposed to reward higher quality, more efficient plans.

Program critics say the program menu is shrinking partly because it has succeeded at encouraging consumers to sign up for better plans and hurt the ability of the lower-quality plans to compete for their business.

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