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Health-care bill or no, Medicare Advantage premiums will rise | Idaho Statesman

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News

Health-care bill or no, Medicare Advantage premiums will rise

Phil Galewitz - Kaiser Health News

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October 01, 2009 10:45 PM

WASHINGTON -- In Miami next year, seniors once again won't have to pay any monthly premiums for a Medicare health plan sold by HMO giant Humana Inc.

Meanwhile, in Philadelphia, seniors will pay premiums of $52 — up from zero — for the least expensive HMO plan from Independence Blue Cross.

The new information underscores the drastic differences in how federal funding cuts next year to the private Medicare health plans known as Medicare Advantage will affect seniors, depending on where they live.

On average, beneficiaries who currently are enrolled in Medicare Advantage plans can expect to pay average premiums of about $39 a month next year, a $7 increase from this year, according to data that the Centers for Medicare and Medicaid Services released Thursday.

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The benefits details also showed that about 660,000 seniors — nearly 7 percent of Medicare Advantage members — will have to change plans or enroll in traditional Medicare because some insurers are dropping coverage. Nearly all those seniors are enrolled in private fee-for-service plans, which are being subjected to much tighter regulations because of consumer complaints.

Most seniors in Medicare Advantage are enrolled in HMOs or preferred provider organizations.

Major changes in some Medicare Advantage plans were expected because of a previously announced 4 percent cut in federal funding for the plans next year. Not all seniors are affected, however. In areas where Medicare pays the highest rates to health plans, such as Miami and New York, seniors will be affected the least and continue to receive the richest benefits.

The changes to Medicare Advantage plans are being closely watched because the program — which covers 10 million seniors — has been at the center of the health care-overhaul debate.

The reduction in federal payments to the plans next year is separate from proposals by President Barack Obama and congressional Democrats to eliminate more than $130 billion in funding to Medicare Advantage over 10 years to help finance health insurance coverage for the uninsured and eliminate what they say are overpayments to the industry.

Those cuts wouldn't begin until 2013. According to the independent Medicare Payment Advisory Commission, the government now is spending an average of 14 percent more on seniors in Medicare Advantage than on those in traditional Medicare.

Health insurers are fighting the proposed cuts in the health overhaul bills, saying they'd be forced to curtail benefits sharply and leave markets that would become unprofitable.

The industry's main lobbying group, America's Health Insurance Plans, said Thursday that the changes to the Medicare Advantage plans in 2010 showed what could happen when funding was reduced.

This "demonstrates the real impact that policy changes can have on the health security of seniors in Medicare Advantage," Karen Ignagni, the CEO of the insurance group, said in a statement. "These unintended consequences could have been avoided."

The Obama administration noted, however, that most seniors still will have a choice of numerous free or low-cost health plans.

"Medicare beneficiaries enrolled in Medicare health plans will continue to have a wide range of plan options in 2010, and those beneficiaries who decide to change plans should find choosing a new plan simpler than in previous years," the Centers for Medicare and Medicaid Services said in a statement.

Next year, nearly all Medicare beneficiaries will have access to Medicare Advantage plans, and almost 87 percent of Medicare beneficiaries will have access to Medicare Advantage plans that don't require premiums, CMS said.

Health plans began marketing their 2010 plans Thursday. Enrollees have from Nov. 15 to Dec. 31 to enroll.

(Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy-research organization that isn't affiliated with Kaiser Permanente.)

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