Gov't Raises Payments to Health Insurers

[Omaha Steve]

http://www.chron.com/disp/story.mpl/ap/fn/5681779.html

© 2008 The Associated Press

WASHINGTON — The government on Monday said it would raise payments next year to insurers that provide health care coverage to seniors by 3.6 percent, a slight increase from last year's boost.

The increase applies to companies in the Medicare Advantage program, the privately run wing of the government health care plan for seniors. Officials from the Centers for Medicare and Medicaid Services said the increase is slightly lower than the estimated 3.7 percent expected growth increase for Medicare in 2009.

Last year the agency increased payments on average by 3.5 percent.

About 22 percent of the 44 million seniors in Medicare receive their benefits from private companies. The government pays insurers a set fee for each enrollee, which varies by the county they live in.

Wall Street was still analyzing the payment increase Monday evening, though it appeared to be lower than some analyst projections.

The 2009 payment rate will serve mainly as a benchmark against which companies offer services, rather than a final payment amount. Companies typically offer to provide Medicare benefits for less than the benchmark because they can use the remaining money to offer additional benefits, including dental and vision care. Those extras can help attract new enrollees.

FULL story at link.