U.S. Raises Medicare Payments to Insurers by More Than Expected
05 April 2017 - 3:16AM
Dow Jones News
By Stephanie Armour
Federal regulators will give a larger-than-expected average
payment increase to insurers that offer private Medicare plans.
The boost will aid companies that offer the plans under Medicare
Advantage, the program in which beneficiaries can get Medicare
policies from private companies. The insurers are then paid by the
federal government.
Insurers selling the plans will see their payment rates go up by
0.45% on average next year, according to the Centers for Medicare
and Medicaid Services. That is higher than the 0.25% increase the
government had floated earlier this year.
"These programs have been successful in allowing innovative
approaches that give Medicare enrollees options that best fit their
individual health needs," CMS Administrator Seema Verma said in a
statement.
Beneficiaries of Medicare, the federal health-insurance program
for people aged 65 and over and the disabled, can choose to opt for
these private alternatives to traditional government-run coverage.
The payments are closely watched by insurers, which lobby to keep
them from dropping as the plans are a major line of business for
many health insurers.
America's Health Insurance Plans, the largest industry trade
group, said more must be done by the Trump administration to
bolster Medicare Advantage. Nearly one third of Medicare
beneficiaries, or about 18.5 million Americans, are in the plans,
according to AHIP.
The organization said steps need to be taken to reduce
regulatory burdens on insurers and change the way providers are
paid. They also called for more flexibility in the program.
"We believe more must be done to ensure beneficiaries are well
supported in achieving their best health," Marilyn Tavenner, chief
executive of AHIP, said in a statement.
Humana Inc. and UnitedHealth Group Inc. are major players in the
Advantage program. The impact of payments on individual insurers
varies depending on their mix of business.
Medicare Advantage enrollment has grown significantly in recent
years, according to a May 2016 report by Avalere Health LLC. Still,
38 million people -- or almost 70% of all Medicare beneficiaries --
still choose to get their benefits from traditional fee-for-service
Medicare.
The payment bump means Medicare Advantage plans will see a total
change of 2.95% in revenue when adjustments to the way medical
conditions are reported are taken into account, according to
CMS.
Write to Stephanie Armour at stephanie.armour@wsj.com
(END) Dow Jones Newswires
April 04, 2017 13:01 ET (17:01 GMT)
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