Disparities in access to Medicare managed care plans and their benefits

Concern about the variation in rates paid to Medicare managed care plans across the United States led to the passage of major reforms of formulas for setting these rates as part of the Balanced Budget Act (BBA) of 1997. However, observers have focused much more on the variation in the rates per se than on the disparity in benefits offered by these plans and in the premiums they charge. This analysis shows that there is considerable variation in the range of risk plans available to Medicare beneficiaries, the premiums charged, and the benefits offered and that the variation is strongly related to the payment made by the Health Care Financing Administration (HCFA) on behalf of the beneficiary and to the beneficiary's area of residence.