California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Sebelius Warns Insurers Against Hiking Rates for Medicare Advantage

Last week, HHS Secretary Kathleen Sebelius sent a letter warning insurers not to increase premiums or copayments for beneficiaries enrolled in Medicare Advantage programs, the Wall Street Journal reports.

On Monday, insurers that offer MA plans are required to submit their 2011 bids to the government (Adamy, Wall Street Journal, 6/7).

Letter From Democratic Lawmakers

Last week, a group of Democratic lawmakers sent Sebelius a letter asking her to thoroughly vet MA plans' 2011 bid submissions. The letter -- signed by Sens. Max Baucus (D-Mont.) and Jay Rockefeller (D-W. Va.) and Reps. Sander Levin (D-Mich.), Frank Pallone (D-N.J.), Pete Stark (D-Calif.) and Henry Waxman (D-Calif.) -- stated that the new health reform law eliminated overpayments to MA plans.

It continued, "In phasing out these overpayments, CMS must ensure that plans work to trim administrative costs and other overhead, rather than merely shifting additional costs onto beneficiaries to preserve their bottom line" (Pecquet, "Blog Briefing Room," The Hill, 6/4).

Sebelius' Letter

In her letter, Sebelius wrote, "Focus on price and quality rather than asking seniors who need health care the most to pay more for it," adding that she can deny insurers' bids with powers granted under the new health reform law if they request excessive price increases.

Some Insurers Aim To Raise Rates

According to consultants who have helped insurers prepare their bids, many companies are planning to increase costs for seniors next year. They noted that MA plans are preparing to eliminate some vision, dental and prescription drug benefits.

Consultants said that the rate proposals are justified because the rate the government pays private insurers to run MA plans remains the same for 2011 as it was for 2010 and the new reform cuts payments to insurers that offer the plans (Wall Street Journal, 6/7).

Robert Zirkelbach, spokesperson for America's Health Insurance Plans, said, "Washington can't slash ... Medicare Advantage and then try to shift the blame to the health plans that administer the program when those cuts inevitably result in higher premiums and benefit reductions for seniors" ("Blog Briefing Room," The Hill, 6/4). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.