WASHINGTON Feb 17 The Obama
administration on Friday issued 2013 payment and policy
guidelines for U.S. health insurers that participate in the
Medicare Advantage program, saying the proposed changes would
bring lower premiums and stable or improved benefits.
But the documents did not include an official preliminary
estimate for the net average percentage change in
reimbursements, leaving insurers and financial markets in the
dark about the guidelines' potential impact on the industry.
Analysts said unofficial estimates suggested a possible
all-in gain of 2.3 percent, far better than market expectations
that had ranged from no change to a decline of 5 percent.
A year ago, the Centers for Medicare and Medicaid Services
estimated a 1.6 percent net all-in rise for 2012 but later
reduced that to 0.4 percent.
CMS, which oversees the federal healthcare program for the
elderly, said on Friday that the 2013 guidelines point to an
overall annual growth rate of 2.47 percent and a 2.3 percent per
capita growth rate next year. But those figures do not take into
account variables such as geographic location.
CMS officials said a net all-in figure for 2013 could be
released among final rates due to be published on April 2.
"This positive growth trend will help ensure that
beneficiaries maintain a choice of plans without significant
increases in premiums or decreases in benefits," the agency said
in a statement.
Medicare Advantage allows the program's 48 million
beneficiaries to purchase private insurance instead of receiving
traditional Part A hospital coverage and Part B physician
coverage. Critics say it pays too much to private insurers.
About 25 percent of beneficiaries participate in Medicare
Analysts were upbeat about the guidelines.
Ipsita Smolinski, a healthcare analyst with Capitol Street,
cited the guidelines' 2.3 percent national per capita growth as
a positive sign for insurers given that Medicare providers are
scheduled to receive reimbursement cuts as a result of deficit
reduction talks in Congress last year.
Ana Gupte, analyst for Sanford Bernstein, added: It should
be good for the health insurers and specifically for the
Medicare Advantaged leveraged health insurers."
Humana Inc. and UnitedHealth Group Inc. are
the biggest providers of Medicare Advantage plans and the most
exposed. Other providers include Aetna Inc., Cigna Corp.
, Coventry Health Care Inc., Health Net Inc.
and WellPoint Inc..
Analysts believe Medicare Advantage will expand as the Baby
Boom generation leaves the workforce and younger retirees opt
for private coverage instead of traditional Medicare.