U.S.
government sets 3.40 percent hike in 2019 payments to
Medicare insurers
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[April 03, 2018] By
Bill Berkrot and Caroline Humer
(Reuters) - The U.S. government on Monday
said it would increase by 3.40 percent on average 2019 payments to the
health insurers that manage Medicare Advantage insurance plans for
seniors and the disabled, a higher-than-expected rise reflecting a
projection of higher medical cost growth.
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The rate, which affects how much insurers charge for monthly
healthcare premiums, plan benefits and, ultimately, how much they
profit, represents an increase over the 1.84 percent increase
proposed by the Centers for Medicare & Medicaid Services (CMS) in
February.
Medicare Advantage plans serve more than 20 million people aged 65
and older.
"Medicare Advantage plans are likely to be pleased by the final
rule," said Ipsita Smolinski, managing director at healthcare
research consulting firm Capitol Street. "Final MA rates are strong
versus the proposal due to the effective growth rate jumping almost
1 percent."
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UnitedHealth Group Inc <UNH.N>, Humana Inc <HUM.N>, Aetna Inc <AET.N>
and WellCare Health Plans Inc <WCG.N> are the largest sellers of
Medicare Advantage health insurance. Under the program, they are
paid a set rate by the government to cover member healthcare costs.
Shares of the insurers were largely flat in extended trading.
CMS Administrator Seema Verma also laid out a plan to provide faster
access to cheaper generic drugs for Medicare recipients. CMS is a
division of the U.S. Department of Health and Human Services.
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The government also said it would extend low-income cost sharing on
generic drugs for patients with Medicare Part D to biosimilar drugs,
which are less expensive versions of high-priced biotech medicines.
Medicare Advantage competes with the traditional Medicare
fee-for-service program. Both have grown as the "Baby Boomer"
generation ages into Medicare. Together, they cover more than 55
million people.
The government said that the new rate reflected a decline in
payments of 2.26 percent related to the Affordable Care Act
requirement that Medicare advantage and fee-for-service Medicare
have the same payment structure.
It also forecast medical services costs, known as the effective
growth rate, to rise by 5.28 percent, up from a prior projection of
4.35 percent, to reflect changes in spending under the 2019 U.S.
budget.
(Reporting by Bill Berkrot in New York and Caroline Humer in Wilton,
Connecticut; Editing by James Dalgleish)
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