* Medicare chief says healthcare law helping elderly
* Says Medicare Advantage premiums down, enrollment up
* HMO shares up slightly, Humana shares down 0.7 percent
(Recasts, adds new material throughout)
By Donna Smith
WASHINGTON, Feb 10 President Barack Obama's
chief of health programs for the elderly and poor on Thursday
said the year-old U.S. healthcare overhaul was reducing
Medicare costs and called a push by congressional Republicans
to repeal the law unfortunate.
Medicare and Medicaid services administrator Donald
Berwick, appearing before a congressional panel, rebuffed
Republican claims that the law would raise costs for people
enrolled in Medicare Advantage (MA), which uses private
insurance providers such as Humana Inc (HUM.N) and UnitedHealth
Group Inc (UNH.N), to deliver benefits.
Berwick told the House of Representatives Ways and Means
Committee that the latest data show premiums are down an
average 6 percent this year, while enrollment is up by 6
percent to more that 12 million people.
Separately, Oppenheimer & Co analyst Michael Wiederhorn
said he expects growth in private Medicare plans to continue to
swell as more of the nation's baby boomer population qualifies
for the program, which covers people age 65 or older.
Such plans "should be an attractive alternative to control
costs ... compared to the inefficient Medicare
Fee-For-Service," he wrote in a research note, adding that cuts
to the plans under the health law could squeeze HMO profits.
Overall, shares of HMOS were up slightly compared to the
larger S&P 500 index. Humana shares were down 0.7 percent at
$58.14 while UnitedHealth was up nearly 1 percent at $42.46 in
afternoon trade on the New York Stock Exchange.
As Berwick testified, Democrats released a report by the
Government Accountability Office that said many Medicare
Advantage programs spend a high percentage of premiums on
administrative costs and profits.
"One out of every three MA enrollees is in a plan that
spends less than 85 percent of their projected Medicare payment
on medical expenses, which means more than 15 percent of their
projected Medicare payment goes to overhead and profit," the
report said. The healthcare overhaul places limits on how much
insurers can spend on profits and administrative costs.
At the Ways and Means hearing, Republicans pointed to
prepared testimony by the Medicare and Medicaid agency's own
chief actuary, Richard Foster. He predicted higher costs and
lower enrollment in Medicare Advantage as changes in government
payments under the new healthcare law go into effect.
Berwick said that Medicare Advantage providers have been
aggressive in advertising and enrolling new beneficiaries.
"This law means real improvements for Medicare
beneficiaries, now and in the future," Berwick said in his
written testimony to the Ways and Means Committee. "That's why
the House vote to repeal this law was unfortunate."
It was Berwick's first appearance before the House panel
and Republicans, who are pushing to repeal the law and deny
funding for its implementation, pressed for yes and no answers
on its effect on Medicare. Berwick said the law was complicated
and said it was difficult to be that specific.
"I am most disappointed in the lack of candid answers,"
said Republican Representative Geoff Davis.
(Additional reporting by Susan Heavey; Editing by Xavier