TABLE 1.
Medicare | Private Employers | |
---|---|---|
Federal endorsement |
TEFRA 1982 | HMO Act of 1973 |
Benefit package | Required, at minimum, to provide the same benefits as covered under Medicare Parts A and B. Plans use savings earned from covering the basic benefit to cover additional benefits, such as prescription drug coverage, or to lower cost-sharing requirements. |
HMO Act of 1973 required “federally qualified plans” to provide “basic health services.” Basic services requirements relaxed through amendments beginning in 1976. |
Plan selection: market level |
Plans choose the areas in which to participate (at the county level). Medicare accepts any qualified plan. |
Provision of HMO Act of 1973 required employers to offer the choice of at least one qualified HMO plan in their area. Plan negotiates with employer to be included in those plans available to employees. |
Plan selection: enrollee level |
Beneficiaries may join any qualified plan in area and may opt in to or opt out of TM each month. |
Enrollees may choose or switch plans each year. |
Plan payment | Capitation based on Medicare formula:
|
Capitation. Plans set premiums or negotiate payments with employer. |
Enrollees’ premium |
Plans choose premium, subject to regulation.
|
Employer sets employees’ premium payment for HMO and alternative plans. |
Note:
AAPCC = average adjusted per-capita cost.