Medicare to offer CDHPs in 2007

In yet another sign that consumer-driven health plans (CDHPs) are here to stay, CMS has announced that the plans will be available through Medicare in 2007. The CDHPs will be used in conjunction with medical savings accounts (MSAs) that are similar to health savings accounts (HSAs) but allow beneficiaries more flexibility. The program is designed to protect Medicare recipients from catastrophic costs and lower premiums. Medicare will even cover the amount below the deductible by contributing money to the MSA. Once that money is used, recipients can continue to receive care that would traditionally be covered by Medicare. "We are now providing some needed flexibility to make the increasingly popular consumer-directed plans available to Medicare beneficiaries, and we are going to provide support for our beneficiaries to make informed decisions about their health care spending," noted CMS administrator Mike Leavitt.

At The Health Care Blog, Matthew Holt questions the wisdom--and motivation--behind incorporating CDHPs into Medicare. He speculates that CMS will eventually move the entire program over to CDHPs and not cover the deductible.

- read this Modern Healthcare report
- check out The Health Care Blog for Matthew's take on the situation

PLUS: Perhaps CDHPs are the way to go: Next year, seniors will face Medicare premiums of almost $100 a month. Article

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