The role of private health plans in Medicare expanded substantially in 2004 under the Medicare Modernization Act, which builds on plan experience under Medicare+Choice, created in 1997 to offer more managed care choices for beneficiaries and recently renamed Medicare Advantage. Although sponsors originally hoped Medicare+Choice would lead to a greater role for private plans in Medicare, this report notes that the program is widely viewed as a failure, with plans leaving and beneficiaries having fewer, less attractive choices when the program ended in 2003 than they did when it began. As private plans continue to be a focal point for changing Medicare in the future, the researchers note that policymakers need a better understanding of the dynamics of the system to facilitate a successful transition in this latest effort.