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Medicare’s Future: Current Picture, Trends, and Medicare Prescription Drug Improvement & ... - page 59 / 60

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Structural Change: Increased “Privatization”

Stand-alone private drug plans

Establishes Medicare Advantage—HMOs and new regional PPO options

Subsidies to encourage private plan participation—extra payments to HMOs begin 2004; average payments exceed those in traditional Medicare

Moves toward defined contribution plan—demonstration of competition between traditional Medicare and private plans starts in 2010

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