NEW YORK (Reuters) – The US government on Monday said it would increase by 2.53 percent on average 2020 payments to health insurance companies managing Medicare Advantage insurance plans for the elderly and disabled, a reflection of a new estimate of medical cost growth .
FILE PHOTO: A photo picture shows a stethoscope and blood pressure machine at a French general practitioner who was shown at a doctor's office in Bordeaux on January 7, 2015. REUTERS / Regis Duvignau / Filfoto
Frequency, which affects how Many insurance companies charge for monthly health benefits , plan benefits, and finally, how much they earn, represents an increase over the 1.59 percent increase suggested by the Centers for Medicare & Medicaid Services (CMS) in February.
The government increased the final payment rate from the proposed rate after revising its estimate of medical services increase for next year. The final estimate of this growth is 5.62 per cent compared to 4.59 per cent in the February proposal.
"Most of the puts-and-take was the same as suggested, but the CMS provided the growth rate, which is definitely useful in 2020," said Ipsita Smolinski, managing director of health care research consulting firm Capitol Street.
Medicare Advantage plans earn more than 20 million people, most of them aged 65 years and older.
Shares in the insurance companies remained unchanged in the after-sales trade. United Health Group Inc., Humana Inc., CVS Health Corp., through the acquisition of Aetna, and WellCare Health Plans Inc are the major sellers of Medicare Advantage Health Insurance.
During the program, they are paid a fixed rate by the state to cover members' health costs.
In addition to medical expenses, the government's payment frequency for 2020 is also a factor in other policy changes, such as the quality of care-related payments that can lead to year-on-year decline or increase.
For example, the 2020 rate reflected a decrease in payouts of 3.08 percent related to the Affordable Care Act requirement that Medicare Advantage and service fee Medicare have the same payment structure.
Beginning in 2020, the Medicare Advantage plans will also offer additional, non-health benefits to chronically ill enrollees addressing their social needs, said CMS Administrator Seema Verma. They may include necessary structural changes in the home, such as adding ramps and extending doorways.
The plans can tailor these offers to individuals, and the offers can increase competition between plans, Verma said.
Previously, plans have only been allowed to offer health benefits.
Medicare Advantage competes with the traditional Medicare service program fee. Both have grown as the generation "Baby Boomer" in Medicare. Together they cover over 55 million people.
Reporting by Caroline Humer; Editing by Bill Berkrot