Monday, January 6, 2014

Analysts expects slower Medicare Advantage growth

By The Associated Press January 03, 2014 ________________________________________ Enrollment in Medicare Advantage plans will grow more slowly in 2014 than it did the past couple years, predicted a Citi analyst who follows health insurers. Insurers have cut benefits and scaled back coverage, which may make it harder for them attract new customers, said Citi's Carl McDonald in a research note Thursday. Medicare Advantage plans are privately run versions of the government's Medicare program for the elderly and disabled people. Insurers offer hundreds of versions of this subsidized coverage, and the plans often come with extras like vision and dental benefits that are not available with standard Medicare. UnitedHealth Group Inc., Humana Inc., and WellCare Health Plans Inc. are among the biggest providers of this coverage, which has been pressured in recent years by reduced funding. The government has been cutting funding in part to help pay for the health care overhaul, the federal law that aims to cover millions of uninsured people. Insurers have responded by trimming the benefits their Medicare Advantage plans offer, dropping doctors from their coverage networks or, in some cases, pulling out of markets where they feel they can no longer make a profit. Medicare Advantage customers will have about 18 plans to choose from, on average, in 2014, down from 20 last year, according to the Kaiser Family Foundation, a nonprofit that studies health care issues. Enrollment in these plans grew about 9 percent last year to 15.1 million people. McDonald said he expects that growth to slow to about 5 percent in 2014. That works out to about 750,000 new customers. "Since most plans increased premiums and reduced benefits this year, it will be more difficult to attract seniors out of traditional Medicare," he said. But he expects most existing Medicare Advantage members to stay on the plans. Shares of UnitedHealth climbed 71 cents to $75.28 in Friday afternoon, while Humana fell 57 cents to $102.27 and WellCare dropped 58 cents to $69.67. The Standard & Poor's 500 index was almost unchanged. http://www.businessweek.com/ap/2014-01-03/analysts-expects-slower-medicare-advantage-growth

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