WSJ - Medicare Insurers Warned On Rates

[Guest guest]

I love the deliciousness of what the insurance companies are saying.

 

Basically, what docs have said the last decade -- if Medicare doesn't raise it's rates a little each year, it's like a paycut and we eventually lose money.

 

Suspect this is a glimpse of FutureWorld -- where the gov't will start setting rates, margins for insurances will be less, and therefore, what they pay docs will continue to tighten down.

 

http://online.wsj.com/article/SB20001424052748704726104575291121755620054.html

 

Medicare Insurers Warned On Rates

On Monday, insurers that sell Medicare Advantage plans must submit their 2011 bids to the government. In a letter to four insurance-industry executives, Health and Human Services Secretary Kathleen Sebelius warned the companies not to increase premiums and co-payments for seniors.

" Focus on price and quality rather than asking seniors who need health care the most to pay more for it, " Ms. Sebelius wrote in a letter

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Many insurance companies are planning to increase costs for a range of services for seniors next year, according to consultants who have helped prepare their bids. Dozens of Medicare Advantage providers plan to cut back vision, dental and prescription benefits. Some plans are eliminating free teeth cleanings and gym memberships, and raising fees for hearing aides, eye glasses and emergency-room visits.

Consultants cite two reasons for the cuts. The rate the government will pay private insurers to run the plans is frozen for 2011 at 2010 levels, while medical costs are expected to increase an average of at least 6%. Such price increases and benefit cuts will help them recoup that difference, the consultants say.

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The Obama administration and Senate Democrats say that passing those costs on as early as next year is unfair. In her letter, Ms. Sebelius warned insurers that she will deny insurers bids if they include excessive price increases, using new powers under the health law.

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The insurance industry, which estimates the payment cuts from the health overhaul will total approximately $200 billion over a decade, says it can't absorb those cuts on its own, and must pass them onto customers starting next year.

" Washington can't slash $200 billion out of Medicare Advantage and then try to shift the blame to the health plans that administer the program when those cuts inevitably result in higher premiums and benefit reductions for seniors, " said Zirkelbach, a spokesman for America's Health Insurance Plans, the industry's trade group.

Gorman, chief executive of Gorman Health Group, a Washington-based consulting company that works with about 200 Medicare Advantage providers, said, " The expectation is that the operating costs of these plans are going to go up pretty substantially. ...We look at the bids in 2011 as really kind of a bridge to this reimagined " Medicare advantage program.

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