Humana says proposed Medicare cuts appear less than it forecast

Mon Feb 24, 2014 10:17am EST

Feb 24 (Reuters) - Humana Inc said on Monday that the government's proposed cuts to the private Medicare program appear to represent a funding decline of about 3.5 percent to 4 percent, less than the 6 percent to 7 percent it had expected.

Shares in Humana rose 7.6 percent in morning trading.

The U.S. Department of Health and Human Services on Friday released its proposal for 2015 Medicare Advantage funding.

The proposal includes many factors that are used to determine funding, which can vary by plan. Analysts said then the cuts appeared worse than the 7 percent decline that they had been expecting at most.

Humana, which manages Medicare Advantage plans for the government, said in a regulatory filing on Monday that its analysis excluded risk assessments that it planned to protest and which could potentially result in additional significant funding declines.

Insurers have 45 days from the time of the announcement to voice their concerns and a final version of the rule will be published on April 7.

Shares in UnitedHealth Group Inc rose 3.3 percent to $76.23.