The Growth of Private Plans in Medicare, 2006

, details the different types of private plan options available to people on Medicare. These include Medicare Advantage plans (such as Medicare HMOs, PPOs and private fee-for-service plans) and new stand-alone prescription drug plans.

• In 2006, all Medicare beneficiaries have access to at least one type of private Medicare Advantage plan, up from 77% in 2004. The increase in access stems largely from the creation of new Medicare regional PPOs and the expansion of private Medicare fee-for-service plans. About 13% of Medicare beneficiaries (5 million) are enrolled in private Medicare Advantage plans.

• The introduction of regional PPOs in 2006 and the growth in private fee-for-service plans have expanded access to private plans in rural areas, but HMOs continue to be more common in urban areas. Medicare HMOs are not offered in eight states: Alaska, Delaware, Maine, Montana, North Dakota, South Dakota, Vermont and Wyoming.

• Special needs plans are available in all but nine states. These plans serve beneficiaries who are eligible for Medicare and Medicaid, institutionalized beneficiaries and those with severe, chronic, and/or disabling conditions.

Issue Brief (.pdf)