Medicare Advantage plans may be more costly in 2010

The federal government says it expects to cut reimbursement payments to private insurers that offer Medicare Advantage programs in 2010, opening the possibility for higher payments for seniors looking to manage their retirement living budgets.

The Centers for Medicare & Medicaid Services announced that up to 4 perc

Medicare Advantage plans may be more costly in 2010 ent in reductions are expected, including a 3.4 percent reduction in payments based on differences in disease coding between the federal program and private plans as well as a 0.6 percent reduction for indirect medical education costs.

There will also be a cap of 4.6 percent on the increase in costs associated with the Part D prescription drug plan, CMS reported, increasing the deductible by $5 and the initial coverage limit by $50 to $310 and $2,830, respectively.

Many are questioning who will bear the burden of making up the difference between the reduced reimbursements and the costs to insurers, such as Humana and United Health, the number one and two Medicare Advantage insurers in the country with each enrolling more than one million senior citizens in their plans.

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