CMS announced approval of 143 new Medicare Advantage (MA) plans to provide services in 2005. With the addition of these new plans, Medicare beneficiaries in 49 states will have access to 428 health plans across the nation.

The new MA plans include 41 plans completely new to the Medicare program and 66 new local PPOs. Some 90 current providers plan to increase their service areas this year. Many of these plans have already begun offering services; 53 will begin to offer services on July 1 and 25 will begin to offer services in August, with even more offerings planned for September. In addition, for Medicare beneficiaries with special needs, CMS has approved 48 Special Needs Plans (SNPs) to serve beneficiaries in 2005 and is reviewing more than 100 additional SNP applications that have been submitted to provide services in 2006.

With these expansions, 73 percent of Medicare beneficiaries will have access to HMO plans, 52 percent will have access to PPO plans, and 80 percent will have access to private fee-for-service plans. The vast majority of beneficiaries in rural areas will have access to private fee-for-service (PFFS) plans, and nearly 20 percent of beneficiaries in rural areas will have access to HMOs or PPOs, most for the first time. Altogether, there are just over 5 million beneficiaries currently enrolled in MA plans, with an average of 50,000 beneficiaries per month joining the plans since last year.

CMS is currently reviewing the applications, formularies and bids submitted by MA organizations, including the new regional PPOs, and by prescription drug plans that want to serve Medicare beneficiaries in 2006. CMS expects to finalize contracts with those organizations later this year.