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Health plans to lower premiums with new federal medicare funds.

Two weeks after the Centers for Medicare & Medicaid Services said it would raise payments to health insurers that offer Medicare Advantage plans by an average of 10.6%, health plans said they would lower premiums for nearly all of their members.

Medicare Advantage beneficiaries can expect access to more affordable, enhanced coverage as a result of the new 2004 funding rates, according to the American Association of Health Plans-Health Insurance Association of America, which surveyed member companies that participate in the program. Medicare Advantage plans have replaced the old Medicare+Choice coverage.

Plans that represent more than 93% of the market plan to use the money to lower monthly premiums, AAHP-HIAA said. One plan in New England is lowering premiums an average of 23%, which is a typical example, the group said. Beneficiaries of the plan will save as much as $67 a month. A majority of the plans also are reducing copayments and deductibles. More than 80% of beneficiaries are in line for reduced copays and deductibles, health plans told AAHP-HIAA.

Meanwhile, plans that cover more than 60% of beneficiaries said they would use the funding to enhance of increase benefits through prescription-drug coverage, preventive screening and disease-management programs, according to the survey. For 75% of beneficiaries, their plans said they would strengthen and broaden pbysician and hospital networks, AAHPHIAA said.

Thirty-three companies said they plan to offer health savings accounts, while 30 other companies were considering it, the group said. In addition, 37 companies said they are applying to offer drug discount cards, while 31 are considering offering new Medigap packages in 2006.

As a result of the changes, 80% of health plans said they expect enrollment to increase in 2004, and 75% said they expected it to go up even further in 2005, said AAHP-HIAA spokesman Mohit Ghose. That would reverse the five-year trend of slow growth and declining availability of private Medicare plans.
Medicare Funds

Targeted uses * for additional
Medicare advantage funds.

 Percentage of Beneficiaries
 Represented by Responding

 Premiums 93%
Beneficiary Cost
 Sharing 80%
 Benefits 60%

* Many companies have targeted more
than one category

Note: Table made from bar graph.

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Title Annotation:Briefing
Comment:Health plans to lower premiums with new federal medicare funds.(Briefing)
Author:Suszynski, Marie
Publication:Best's Review
Geographic Code:1USA
Date:Mar 1, 2004
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