Insurers Increase Medicare Advantage Plan Premiums By 13% On Average This Year, According To Avalere Health

Main Category: Medicare / Medicaid / SCHIP
Article Date: 06 Feb 2009 - 2:00 PDT

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Premiums for Medicare Advantage plans provided by Humana, Health Net and almost 200 other health insurance companies rose by an average of 13% in 2009, more than five times the 2008 increases, according to an analysis by Avalere Health, Bloomberg/Philadelphia Inquirer reports. (Goldstein, Bloomberg/Philadelphia Inquirer, 2/5).

In January, Democrats, led by then-President-elect Obama and Senate Majority Leader Harry Reid (D-Nev.), in January signaled their intent to "scale back" the MA program. Obama in a television interview cited MA as an example of "programs that don't work," adding that it "doesn't necessarily make people on Medicare healthier." Congressional Democrats have pledged to cut $50 billion in federal subsidies to the MA program, which offers private health insurance plans to more than 10 million of the 45 million Medicare beneficiaries. MA cost the government 13% more per beneficiary on average than the regular Medicare plan in 2008, according to the Medicare Payment Advisory Commission (Kaiser Daily Health Policy Report, 1/15).

Arnold Relman, former editor of the New England Journal of Medicine, said the premium increases, which are charged directly to beneficiaries instead of the government, are evidence that insurers' aims for profit are raising patient expenses and reducing efficiency of care.

Former CMS Administrator Thomas Scully, who helped design the MA program, said that insurers also collected about $5 billion in MA premiums from beneficiaries last year. Scully said that he did not consider the premiums excessive and that MA plans were less costly than alternatives (Bloomberg/Philadelphia Inquirer, 2/5).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2009 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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