Daily News Updates - Health Insurance News

New Business for Insurers, Pt.5 – SCHIP, std. Medicare to hedge Advantage.

Previous…

All this expansion is neither intended or likely to be a heyday for the health insurance industry. They’re more like an offset. Cutbacks are expected in a related sector. The lucrative Medicare Advantage plans for the elderly are under the democratic spotlight. Up to this point the private health insurance sector has been permitted to manage Medicare costs. As a result, the payment returns to beneficiaries in this area run about 13% higher than for other traditional, government-run Medicare. This niche was heavily promoted by the Bush administration as a big source of private health insurance industry profits. Now it has become a target for reform by democrats and the industry anticipates inevitable cutbacks in this sector. So, quite understandably, the industry is seeking ways to hedge this losing sector with a gaining one.

The health insurers have been expecting to experience cutbacks in the so-called Medicare Advantage plan payments for some time now. Chief executive of Universal American Financial Corp., Richard Barasch, acknowledges this event by saying: "We've been assuming for a while there would be changes in reimbursements and planning for it." The Universal American Financial Corp. are one of the largest players in the private Medicare plan health insurance market.

In anticipation of this, the largest provider of the Medicare Advantage health insurance plans, Humana Inc., is introducing plans to participants for the first time in a longer-range 2009 strategy to move people over into plans which rely on hospital and doctor networks. The goal is to better control medical costs.

Continued…
November News...