Government Announces 2010 Medicare Advantage Rates

TOM MURPHY

INDIANAPOLIS (AP) — The federal government said Monday it will bump up a rate used to figure Medicare Advantage reimbursement to insurers, but many analysts expect overall payment rates to fall next year.

That raises some concern for how lower reimbursement will affect the plans, which allow the elderly and disabled to receive benefits through private health insurers.

These plans receive a government subsidy and generally offer more benefits than traditional Medicare, but they've drawn criticism for their cost.

The trade association America's Health Insurance Plans estimates that Medicare Advantage payments could fall nearly 5 percent next year as a result of the changes. Spokesman Robert Zirkelbach said the cut could lead to higher premiums and benefits reductions for the more than 10 million people enrolled in Medicare Advantage.

"It's an unnecessary disruption in the health security of seniors on Medicare Advantage," he said.

Wachovia Securities analyst Matt Perry, who covers managed care, said the reimbursement likely will fall between 4 percent and 5 percent next year.