The Balanced Budget Act of 1997
The Balanced Budget Act of 1997 (BBA 97) has resulted in a dramatic change in the way that Medicare
will function in the future. In 1997, Congress passed the Balanced Budget Act of
1997, which significantly modified the Medicare managed care program. Over
the next five years, BBA 97 will result in Medicare funding reductions of $115
million 
.
Before BBA 97, Medicare acted as the insurer, directly paying hospitals and
physicians. As a result of BBA 97, which created the Medicare + Choice program, Medicare will become the payer for a variety of health care options
for older adults. It is expected that the Medicare + Choice program will
further encourage the growth of enrollment in Medicare managed care by giving older
adults more choices within a managed care setting.