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How does the healthcare law change how Medicare Advantage plans are paid?

Currently, Medicare pays subsidies to the private companies that offer Medicare Advantage plans. This means that these plans cost the Medicare program more than Original Medicare.

In 2012, Medicare started to reduce these subsidies so payments will be more in line with Original Medicare. The changes in Medicare Advantage payments will save the Medicare program money. Some of the savings will be used to close the Medicare prescription drug coverage gap, or "doughnut hole," and to provide more preventive care to people with Medicare.

Medicare Advantage plans will differ in how they respond to the lower subsidies. This will depend partly on the state and county where the plan is located and how much quality bonus money the plan receives.

The lower subsidies could mean that some plans may drop extra services such as eyeglasses and gym memberships. Some plans may raise their premiums and copayments. Others may even decide to leave the Medicare program.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.