Study: Government pays more for private Medicare plans

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Private Medicare Advantage plans, which were projected to help lower program costs, actually cost the federal government an extra $5.2 billion in 2005, new research indicates.

In other words, on average, the Centers for Medicare & Medicaid Services paid 12.4% more per private plan enrollee in 2005 than the agency would have paid for same enrollees in the traditional Medicare fee-for-service program, according to an analysis by the Commonwealth Fund.

Eliminating extra payments to private plans could save Medicare about $30 billion over five years, the researchers estimate. Medicare is one of the top reimbursement sources of long-term care services in the U.S.