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Issues and Answers

Issue.What effect will the Medicare Prescription Drug, Improvement, and Modernization Act (PubLNo 108-173) have on Medicare+Choice?

Answer. Most of the changes in this law will not go into effect in 2004. One of the most significant changes is the introduction of the "Medicare Advantage" program, which eventually will replace Medicare+Choice. CMS faces a January 1, 2006, deadline to update plan materials to reflect the name change. Up until that deadline, CMS may use the terms "Medicare Advantage"and "Medicare+Choice" interchangeably.

Other significant changes that go itno effect in 2004 include the following --

  • all private plans will be paid at a minimum the Medicare fee-for-service rate;
  • the calculation of the annual capitation rate is modified;
  • M+C plans may offer a prescription drug discount card as a benefit; and
  • the medical savings account option, detailed below, which was set to expire, has been made a permanent option.

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