Updated April 20, 2004

	Introduction

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA, P.L. 108-173 ) added a voluntary prescription drug benefit to Medicare and made manychanges to the Medicare+Choice (M+C) program, now called Medicare Advantage (MA). Changes to MA include(1) increased payment rates, (2) a competition program in2006, (3) the addition of regional plans beginning in 2006, and (4) a six-year comparative cost adjustment programin 2010 that enhances competition between MA plans andrequires traditional Medicare to compete with MA plans. Although plan participation is likely to increase due tothe increased payments, long-term plan participation isunknown. Starting in 2006, plans will beencouraged (but not required) to serve entire regions designated by the Secretary as part of a new regional program. The CCA program isdesigned to enhance competition between local private plans in the Medicare program and to compare the overallefficiency of these plans with respect to traditional Medicare.
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (P.L.108-173) added a voluntary prescription drugbenefit to Medicare and established the Medicare Advantage program to replace the Medicare+Choice program. Theact increases payments to private plans beginning in March2004, creates a new competitive program in 2006, adds a regional program also in 2006, and creates a temporaryprogram that requires traditional Medicare to compete withprivate plans in 2010. These changes were designed to increase private plan participation and to increasecompetition in Medicare. Although plan participation is likely toincrease in the short-term, long-term participation is unknown. This paper outlines major changes to the managedcare program and indicates how these changes may affectparticipation. This report will not be updated.