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Cuts Drive Up Medicare Supplement Costs

From a very discreet Associated Press:

Premiums jump 14 percent on Medicare private plans

By Ricardo Alonso-zaldivar, Associated Press Writer

February 19, 2010

WASHINGTON – Millions of seniors who signed up for popular private health plans through Medicare are facing sharp premium increases this year — another sign that spiraling costs are a problem even for those with solid insurance.

A study to be released Friday by a major consulting firm found that premiums for Medicare Advantage plans offering medical and prescription drug coverage jumped 14.2 percent on average in 2010, after an increase of only 5.2 percent the previous year. Some 8.5 million elderly and disabled Americans are in the plans, which provide more comprehensive coverage than traditional Medicare.

"These premium increases fit within a broader trend of increased financial pressure on the insured," said Lindsey Spindle, a vice president of Avalere Health, a data analysis firm that produced the statistical study. "We see very large premium increases and a continued upward creep in how much out-of-pocket expenses beneficiaries are expected to pay, such as copayments."

The Medicare findings are bad news for President Barack Obama and his health care overhaul, bogged down in Congress. That’s because the higher Medicare Advantage premiums for 2010 followed a cut in government payments to the private plans last year. And the Democratic bills pending in Congress call for even more cuts, expected to force many seniors to drop out of what has been a rapidly growing alternative to traditional Medicare.

Notice how far down in the article the Associated Press buried the true cost of this giant uptick in the cost of the supplemental premiums: cuts by the federal government, with more on the way.

Republicans have seized on the Medicare Advantage cuts in their campaign to derail the health care bills, and seniors are listening. Polls show they are they are more skeptical of the legislation than the public as a whole, even though Democrats would also reinforce original Medicare by improving preventive benefits and narrowing the prescription coverage gap. About three-fourths of Medicare recipients remain in the traditional program…

The AP also somehow failed to note that the American Association Of Retired Persons, the AARP is one of the main if not the major provider of these supplemental Medicare insurance programs.

In fact, the AARP earns more income from selling insurance to its members than it does from membership dues.

This article was posted by Steve on Friday, February 19th, 2010. Comments are currently closed.

4 Responses to “Cuts Drive Up Medicare Supplement Costs”

  1. tranquil.night says:

    Yes, it would appear in the past 24 or so HealthCare is picking up legs with the Left again. This report fits the media’s recycled effort here to remind us that HealthCare remains a total crisis.

    Bayh’s said he’s in on reconciliation now that he’s retiring; unsurprising.

    And now, from the NYT: Obama’s plan next week will apparently be intended for reconciliation.

    “Democratic officials said the president’s proposal was being written so that it could be attached to a budget bill as a way of averting a Republican filibuster in the Senate. The procedure, known as budget reconciliation, would let Democrats advance the bill with a simple majority rather than a 60-vote supermajority.”

    “It will be a reconciliation bill,” one Democratic aide said. “If Republicans don’t come with any substantial offers, this is what we would do.”

    Aaannd.. on Rachel Maddow last night, Sebelius says if the bipartisan summit fails (i.e. the Republicans fail to concede) then Reid could reintroduce the public option for a possible reconciliation vote:

    “Maddow: “The private insurance company writ large hasn’t done a great job. That’s why we want a public option to compete with them. These 18 Democratic senators want to bring that back into the fold. If that happened, would the administration fight for it?”

    Sebelius: “Well, I think if it’s…Certainly. If it’s part of the decision of the Senate leadership to move forward, absolutely.”

    Like Rush said, this is all lip service. The Republicans need to bail now.

    Here we go everyone.

  2. proreason says:

    Medicare isn’t hard to fix. Paul Ryan has the right approach.

    a. Peg the benefits date to then-current average longevity. Example, if average longevity is 79, payments begin at 65. When it goes to 80, payments begin at 66.

    b. Pay the benefits as a voucher that can only be used to purchase private health insurance.

    Problem solved.

    Of course, if they invent a billion dollar pill that gives eternal life, not everybody will be able to buy it (which is the real problem anyway, isn’t it?)

  3. canary says:

    AARP & other life insurance companies may make a killing in not paying beneficiaries of life insurance policies in full, if Obama health care bill prevents the elderly from taking certain life-saving treatment. Ads will go from “buy now, we promise the terms of your policy will never change” to “buy health insurance now, as Government community death aid can affect your life-insurance benefits for your loved ones.

  4. amywjackson says:

    I work with medicare beneficiaries and I can tell you that this really is a travesty. With the advent of Medicare Advantage plans, many people with fixed incomes could afford to pay their medical bills, but with these cuts (and more coming next year), the costs are getting out of control for many people.

    I appreciate the post, but I do have one correction to add. The costs for Medicare plans (i.e. Medicare Advantage plans) have gone up, but a Medicare plan is not the same thing as a Medicare Supplement plan. This is explained in detail on the FAQs section of Medicare National.

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