Medicare will begin offering beneficiaries the option of consumer-driven health plans for the first time in 2007, a move likely to accelerate the push for cost and quality data on providers. The CMS said Medicare Advantage enrollees will have access to medical savings accounts and to more flexible, health savings account-like plans through a demonstration program. The CMS has no projections for initial enrollment. Under the MSA option, Medicare will pay for a high-deductible insurance plan and put money into a tax-free MSA for participating beneficiaries. After the annual deductible, the insurance plan will pay for Medicare-covered services; amounts not used in the MSA will carry over year-to-year for use on future qualified medical expenses.
The HSA-type plans, while similar, will have more flexible benefit designs that could make them more attractive to Medicare beneficiaries and employers with existing HSA options for pre-Medicare employees and retirees, the CMS said. Medicare's contribution will be the same for both options, but HSA-type plans will offer coverage of preventive care, a separate limit on out-of-pocket costs and other features. Medicare Advantage insurers offering an HSA-type plan will be required to provide enrollees with healthcare cost and quality information and other tools, the CMS said. -- by Laura B. Benko