This week, the Centers for Medicare and Medicaid Services announced they will cut the payments to health insurance companies for Medicare Advantage plans by 4 to 4.5 percent.
It’s a promise kept by the Obama Administration who said they would cut the private Medicare plans partly to help fund a major health care and health insurance overhaul, reported the Wall Street Journal.
According the WSJ article, insurers had expected these cuts — but not until 2011.
So if and when these cuts go through, what does it mean for the average policyholder in their Golden Years?
The general word from the insurance industry is that those who have Medicare Advantage will see either reduced benefits or increased premiums. Most likely it would be the latter because, honestly, raising rates probably less of a hassle for insurers.
The Blue Cross Blue Shield Association said the increases would average out between $50 and $80, wrote the WSJ article.
So what will these rate increases do to the some 10 million people are enrolled in Medicare Advantage plan? Maybe more will drop it and move to regular Medicare. Maybe insurance companies are making too much of a stink and the Medicare Advantage market won’t be drastically affected.
As we seem to say a lot here… we’ll have to wait and see.