Posts Tagged ‘healthcare costs’

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90-Year-Olds Growing in Numbers

Tuesday, November 29th, 2011

Is 90 the new 85? The number of Americans over the age of 90 has skyrocketed from 720,000 in the year 1980 to more than 1.9 million in 2010, according to the Census Bureau, which notes that “over the next four decades, this population is projected to more than quadruple.”  Driven by improvements in healthcare, the trend presents challenges.  The Census Bureau notes that “a nation’s oldest-old population consumes resources disproportionately to its overall population size, and its growth has a significant impact on societal and family resources, including pension and retirement income, healthcare costs, and intergenerational relationships.”

According to the study, “People at very old ages are also expected to live longer.  Today a person 90 years of age is expected to live on average another 4.6 years (versus 3.2 years in 1929–1931), and those who pass the century mark are projected to live another 2.3 years.  Women aged 90+ outnumber 90+ men nearly 3 to 1.”

The downside is that people aged 90-plus are more likely to live in poverty or have disabilities, creating a new challenge to already strained retiree income and healthcare programs.

Richard Suzman, director of behavioral and social research at the National Institute on Aging, said “A key issue for this population will be whether disability rates can be reduced.  We’ve seen to some extent that disabilities can be reduced with lifestyle improvements, diet and exercise.  But it becomes more important to find ways to delay, prevent or treat conditions such as Alzheimer’s disease.”

“Given its rapid growth, the 90-and-older population merits a closer look,” said Wan He, a Census Bureau demographer and one of the report’s authors.  “The older people get, the more resources they consume because of healthcare, and disability rates significantly increase.  This creates demands for daily care, and for families the care burden increases dramatically.”

People in this demographic are more likely to have at least one disability, live alone or live in a nursing home.  They’re also more likely to be female, because women typically are longer-lived than men, and are likely to be poor.  “But increasingly people are living longer and the older population itself is getting older.  Given its rapid growth, the 90-and-older population merits a closer look.  The implications for the family and our society of this growing population are likely to be significant,” according to the authors.

The poverty issue cannot be understated because it becomes more likely as a person ages.  From 2006 to 2008, 14.5 percent of people 90 and older lived in poverty, drastically more than the 9.6 percent of those 65 to 89 who were considered poor.  The annual median income for people aged 90 and older was $14,760, as measured in inflation adjusted dollars.  Nearly half of that income — 47.9 percent — came from Social Security, and 18.3 percent came from retirement pensions.  Fully 92.3 percent of those 90 and older received Social Security income.

And where do these nonagenarians live? According to Census figures, smaller states had the highest shares of their older Americans who were at least 90.  North Dakota had approximately seven percent of its 65-plus population older than 90.  It was followed by Connecticut, Iowa and South Dakota.  When considering absolute numbers, the retirement havens of California, Florida and Texas led the nation in the 90-plus population, each with more than 130,000.

By 2050 – just 39 years from now – the number of Americans 90 or older could total nine million. “I think it’s going to grow even faster than predicted in the report,” Suzman said.  Someone who lives to 90 today is likely to live almost another five years, the study noted.  Additionally, a person who lives to celebrate a 100th birthday is likely to live another 2.3 years.  Women aged 90 and older outnumbered men by 3 to 1, according to the study.  Nearly 80 percent of those women are widows, while more than 40 percent of the men are married.

Edmund H. Duthie, a professor of medicine and chief of the division of geriatrics and gerontology at the Medical College of Wisconsin, said the census numbers point to a sobering fact: Retirement may be longer than people expect.  “Are you going to outlive whatever you put aside?”  Duthie said.  “Most people wouldn’t think that if you retired at 60, you may have a third of your life to live.”  Duthie said it was unclear how the nation’s obesity epidemic might affect longevity as well as chronic illness.  America, he said, remains concerned with rates of dementia and how society will cope with the problem.  “The science base of what we do with the oldest old is something that we’re lacking,” he said.  “We can measure cholesterol and blood pressure, but what does it mean in a 90-year-old?  We need to be enrolling these oldest old in studies to understand more about what to do.”

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Healthcare Costs Starting to Slow Down

Wednesday, October 26th, 2011

The increase annually in healthcare costs appears to be slowing.  According to Sandra Block of Gannett News Service, “If there’s any good news to be found, it’s that the increase in overall costs of providing healthcare to employees has slowed.  Tower projects an increase of 5.9 percent in 2012, which represents a significant change from 7.6 percent in 2011.  Mercer, another human resources consulting firm, predicts that employee healthcare costs will rise 5.4 percent in 2012.  That’s small consolation, though, to employees whose income hasn’t kept pace with the rise in healthcare costs.  In August, personal income fell 0.1 percent from July, driven by a decline in wages and salaries, according to the Bureau of Economic Analysis.”

There’s bad news for Americans whose healthcare insurance is provided by their employer.  According to Towers Watson, a human resources consultant, employers will pass on cost increases primarily through higher employee premium contributions.  Towers Watson says that 66 percent of firms will increase employees’ share of premiums for single-only coverage in 2012; 73 percent will increase the share of premiums for dependent coverage.  A survey by the National Business Group on Health (NBGH) found that 53 percent of employers intend to increase employees’ share of premiums, while 39 percent plan to increase in-network deductibles.

The yearly survey by NBGH, a not-for-profit alliance of 83 of nation’s largest companies — employing more than million workers — expect healthcare costs to continue rising significantly faster than inflation because of medical inflation and the Patient Protection and Affordable Care Act.  “This is an unsustainable model for our country,” said Helen, Darling, the NBHG’s president and CEO, referring to the financial strains caused by the ongoing increases.  Some believe that the rising healthcare costs stemmed from components of the 2010 federal healthcare law, including its mandate to cover the offspring of workers up to age 26 and its coming bans on caps for annual benefit limits.  Employers said a variety of cost-saving moves to counter the rising cost of their health coverage, including encouraging employees to use centers of excellence for transplants and other procedures.  “Even if they spend more on the initial admission, they spend less overall due to less need for readmission or re-treatments,” Darling said, in reference to incentivizing employees to seek treatment at highly rated hospitals.

At the time of year when open enrollment begins, employers want their employees to be healthier as a means of controlling costs.

Employers also will encourage their employees to choose high-deductible plans — with lower premiums – and persuade workers to be savvy healthcare shoppers.  Some employers will require significantly higher premiums for employees who do not agree to monitor their own health and address problems.  At a time when both employers and workers are weary of paying more for health coverage, experts say it’s important this year to closely study new wellness programs — as well as all the other options on the table — to take advantage of any savings.  “Healthcare costs are going to continue to grow significantly and for your own health and your own wealth and financial good, you need to get fully engaged in understanding what your choices are,” said Tony Holmes, a partner with Mercer.

Holmes said employers expect to pay 5.4 percent more for health plans in 2012 — about a half percentage point below the typical increase over the past 10 years.  Nearly one-third of employers plan to increase premiums for employees, according to Holmes.  Charges to cover a spouse or children are even more likely to climb; more than 40 percent of large employers plan to increase the costs for dependents.

Some businesses are moving away from co-pays, where employees pay a fixed dollar amount for healthcare services and the plan picks up the rest. Instead, they’re charging workers a percentage of the total costs.  That has the goal of making consumers more aware of the total cost of the healthcare they use.  “We are clearly seeing a march toward a more aggressive consumerist system,” the NBHG’s Darling.

Mercer also found that utilization of healthcare services has slowed in 2011. The difficult economy, higher deductibles and other forms of increased employee cost-sharing, may impact utilization, Mercer said.  “Because employees have less disposable income and are working longer hours, they are less likely to seek non-urgent care.”  Additionally, utilization may be slowing because of employer programs aimed at earlier detection of health problems, Mercer said.  “Earlier risk identification and health education, along with improvements in drug therapies and medical technology, are keeping people with health risks and chronic conditions away from the emergency room,” Susan Connolly, a partner in Mercer’s Boston office, said.  The findings are based on responses from almost 1,600 employers.  In the end, approximately 2,800 employers are expected to respond, with the results — including the actual average healthcare plan cost increase for 2011 — to be released this year.

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Budget Cuts Put Medicaid, CHIP at Risk

Tuesday, August 23rd, 2011

With Medicaid due to cover millions of uninsured Americans in just three years,  state funding cuts may undermine how much care the government-run healthcare insurance program for the poor will offer new enrollees.  As many as 24 states plan to slash a minimum of $4.7 billion from their Medicaid plans thanks to four years of budget shortfalls, according to data provided by the nonpartisan Center on Budget and Policy Priorities and Families USA, a consumer-advocacy group.  The cuts might include reductions of as much as 15 percent in reimbursement rates for physicians, hospitals and other care providers, higher co-pays for beneficiaries, including children, and the loss of optional benefits, including preventive care as well as dental and vision services.  Some states plan to restrict eligibility under enhanced Medicaid plans that offer services beyond the basics. 

“The provider rate cuts are going to mean that fewer providers will offer Medicaid services by the time we get to 2014, and that’s bad. It pulls in the opposite direction of where healthcare reform’s trying to go,” said Mike Leachman of the Center on Budget and Policy Priorities. 

As Congress works to cut the federal deficit to meet a November deadline, additional cuts to the $427 billion Medicaid program also are likely.  Medicaid is funded jointly by federal and state governments but administered by the states with federal oversight.  The growing pressures mean access to healthcare services under Medicaid may be restricted, despite its role in expanding health coverage to 32 million more people under President Barack Obama’s Patient Protection and Affordable Care Act (ACA).  Medicaid and the Children’s Health Insurance Program (CHIP) are expected to add 17 million uninsured Americans starting in 2014, when the ACA requires that a majority of people carry health insurance.  

“We do see a lot of rate cuts,” according to a senior administration official.  “Some of them are going to be more temporary, some of them are going to be more permanent.  Some of them are going to hold and some of them may not hold based on access concerns.  We ought to proceed in a thoughtful way, both we at the federal level and states at the state level,” the official said. 

Already, 10 states have passed laws that cut reimbursement rates for either inpatient or outpatient children’s services provided by Medicaid.  Another nine states have passed laws that will cut children’s access to healthcare or erect new barriers to obtaining coverage.  Illinois, for one, has a two-year moratorium on expanding Medicaid and limited eligibility for CHIP to 300 percent of the federal poverty level.  Indiana slashed its standard for CHIP to 250 percent of the poverty line.  Other state laws want agencies to seek waivers from federal eligibility requirements.

Making a bad situation even worse, Standard & Poor’s recent downgrade of American debt adds to the uncertainty about the future of Medicaid and CHIP.  A bipartisan super committee, composed of 12 Congressmen and Senators –six from each party — must recommend as much as $1.5 trillion in federal budget cuts over the next 10 years.  That is likely to put Medicaid and CHIP, which were supposed to be off the table, into play.  “They’re talking about trillions — with a ‘t’ — in cuts,” said Matt Salo, executive director of the National Association of Medicaid Directors.  “And when you’re talking about trillions in cuts, almost everything has to be on the table.” 

The American Academy of Pediatrics is concerned that some of the aspects of the debt-ceiling proposal will make it into the final cuts for this reason: “Children make up half of all Medicaid enrollees.  It is a lifeline for kids in low-income families and children with special healthcare needs, such as those with congenital heart diseases, spina bifida or cerebral palsy,” said O. Marion Burton, MD, the academy’s president. 

The upside is the fact that Medicaid, as well as Medicare and Social Security, remain popular with the public, according to a recent Pew Research Center survey.

Not surprisingly, there is also a downside.   The number of adult Americans who have health insurance declined in 2010, according to the National Center for Health Statistics, a division of the Centers for Disease Control and Prevention.  Americans of all ages who were uninsured at any point during the last year totaled 60.3 million in 2010, an increase of almost two million when compared 2009.  Private healthcare coverage declined, while public coverage rose, especially for children.  Of non-elderly adults, 61.1 percent had private coverage in 2010, a decline of 1.7 percent.  The percentage of privately covered children fell by 1.9 percent to 53.8 percent.  Fewer children in general lost coverage, because the percentage of children in Medicaid and the Children’s Health Insurance Program rose to 39.8 percent.  The uninsured rate for those earning 100 to 200 percent of the federal poverty level rose to 43 percent in 2010.

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Medicare Changes Would Hit Lower-Income Seniors Hard

Tuesday, August 2nd, 2011

At a time when concern about federal deficits and the national debt are growing,  few quarrel with the need to reform Medicare.  The health insurance program for seniors and people with certain disabilities accounts for 15 percent of the federal budget – in third place behind Social Security and defense spending.  That share is rising as healthcare costs continue to rise and more baby boomers retire, threatening the program’s long-term solvency.

Several of the most prominent solutions under discussion largely derive their savings by shifting a greater share of the cost onto beneficiaries.  The plan sponsored by Representative Paul Ryan (R-WI) and passed by the House of Representatives would significantly cut Medicare spending by capping the government’s contribution to the program and transforming it into a system of “premium supports” given to seniors to help subsidize their purchase of private insurance plans, with seniors paying additional costs.  This would double out-of-pocket spending by the average senior to $12,500 each year, according to Congressional Budget Office estimates.

The ability of a majority of seniors to shoulder that burden appears dubious.  Just five percent of Medicare beneficiaries make $80,000 or more, a figure that includes any income from a spouse. For the 47 percent of seniors who are at or close to poverty, on average they are already spending nearly 25 percent of their budgets on healthcare, according to an analysis by the Kaiser Family Foundation.

“There’s this impression that there’s a great deal of wealth among the Medicare population, this image of wealthy seniors playing golf and enjoying their retirement years,” said Tricia Neuman, director of the Kaiser Family Foundation’s Medicare Policy Project.“But while some are lucky to do so, many are living on a fixed income, struggling to make ends meet…with really limited capacity to absorb rising costs.”

According to the Kaiser Family Foundation’s report, raising Medicare’s eligibility to 67 in 2014 would generate an estimated $5.7 billion in net savings to the federal government, but also result in an estimated net increase of $3.7 billion in out-of-pocket costs for 65- and 66-year-olds, and $4.5 billion in employer retiree healthcare costs.  In addition, the study projects that the change would raise premiums by about three percent both for those who remain on Medicare and for those who obtain coverage through health reform’s new insurance exchanges.  The study assumes both full implementation of the health reform law and the higher eligibility age in 2014 in order to estimate the full effect of both the law and the policy proposal.  In the absence of the health reform law, raising Medicare’s age of eligibility would result in an increase in the uninsured, according to other studies, as many older Americans would have difficulty finding affordable coverage in the individual market in the absence of Medicare.  With health reform, virtually all 65- and 66-year-olds would be expected to obtain alternative sources of coverage.”

Healthcare remains a major focus of budget talks on Capitol Hill,Senator Mark Kirk (R-IL) recently told the American College of Surgeons (ACS).  Every group that relies on federal funding should expect a 10 to 20 percent drop in that funding.  When Dr. L.D. Britt, president of the ACS, warned that such cuts could send some healthcare providers into a “tailspin,” Kirk responded that “the tailspin is the U.S. economy.  There is a new audience at play,” Kirk said, referring to U.S. creditors.  “The judgments they render, they are swift and severe.”  Kirk is optimistic that a solution to the country’s debt-ceiling dilemma “will have a way of concluding itself one day before the August 2 deadline.”

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Healthcare Costs Have Doubled in Just Nine Years

Wednesday, June 1st, 2011

"Where does it hurt?"

American families have seen their healthcare costs rise by more than 50 percent over the last nine years, a trend that shows no sign of reversing, according to a report from the actuarial consulting firm Milliman, Inc.

Healthcare show few signs of dropping, according to a report released Wednesday by the actuarial consulting firm.  When you add in employers’ contributions, this year’s total healthcare cost for a family of four more than doubled to $19,393 from the $9,235 reported in 2002.  The 2011 figure represents a seven percent increase compared with 2010.  The primary reason for the rising costs are primarily due to price increases in categories like pharmacy, inpatient or outpatient hospital care and doctors’ office visits.  Lorraine Mayne, one of the report’s authors, said these charge increases are a bigger factor than changes in how Americans use healthcare.  Even the passage of the Patient Protection and Affordable Care Act, which started phasing in during 2010 and aims to eventually cover millions of uninsured people, had virtually no impact on healthcare costs in 2011, Mayne said.  She doesn’t believe that new law will have any “direct, immediate impact” on the trend.

In an important finding, the study found that employers are making workers shoulder an even bigger share of total health care expenses.   The employee portion of costs paid for a family of four covered by employer-sponsored health insurance will rise to approximately $8,008 this year from $3,634 in 2002.  That is an additional $84 a week from household budgets for healthcare.  Of the $1,319 yearly increase, workers’ out-of-pocket costs rose 9.2 percent in 2011.  That outpaced the 6.6 percent increase in 2010.  Payroll deductions for insurance coverage climbed 9.3 percent this year, an increase over the previous year.  Adding insult to injury, employers’ share of their workers’ healthcare costs fell six percent in 2010, compared with eight percent the previous year.  Of the $19,393 annual cost, employees’ share is moving closer to 50 percent, according to Mayne.  “Employees are paying $8,000 of the $19,000.  That’s a decent amount much larger than other areas of consumer spending.  What we’ve observed in the past few years is employers have increasingly been offering health plans with higher deductibles and co-insurance, co-payment limits,” she said.

The rise in outpatient care is making the difference. For three consecutive years, outpatient care has led all other categories in cost increases – as high as 90 percent.  “Unit costs are increasing both because the same services have increased in price and also because new, more expensive services continue to emerge,” the report says.  Hospital costs represent the second reason for last year’s increase (for the most part because acute care is so expensive), followed by physician care, drug costs, and other types of care, such as durable medical equipment and home healthcare.  People can rein in some costs by moving to a different part of the country, according to Milliman.

Healthcare was costliest in Miami,  where spending averaged $23,362.  New York came in second at $22,785 and Chicago third at $21,996  The three lowest-cost cities were Phoenix, which averaged $17,336; Atlanta, which averaged $18,292; and Seattle, which averaged $18,536.  “These cost differences result from variation in local practice patterns and from differing costs for health care goods and services,” said Chris Girod, a Milliman principal and consulting actuary.

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Healthcare Spending Slowed in 2009

Tuesday, January 25th, 2011

Americans’ healthcare spending grew by just four percent in 2009 (the last year for which statistics are available), the smallest annual increase in 50 years. This suggests that Americans did not seek healthcare because of lost jobs and a lack of healthcare insurance due to the recession.  At the same time, healthcare insurance premiums increased at a faster pace than in 2008.  Additionally ,the number of Americans with coverage fell by 6.3 million.  Out-of-pocket spending on healthcare showed a slight increase.  Medicaid spending rose sharply by nine percent, compared with less than five percent in 2008.  This is a result of more people qualifying for Medicaid, again because of the recession.

The statistics, released by the Department of Health and Human Services (HHS), are a sign that the recession left a deep imprint on healthcare in America – far worse than other recent recessions.  “Job losses caused many people to lose employer-sponsored health insurance and, in some cases, to forgo health-care services they could not afford,” according to economists and statisticians at HHS’s Centers for Medicare and Medicaid Services.  The report, which has been compiled by the government annually since 1960, is the most recent snapshot of spending across the healthcare system.

Healthcare spending in the United States totaled $2.5 trillion in 2009, adding up to an average of $8,068 per person.  The four percent rise recorded in 2009 compares with more than six percent in 2007, eight percent in 2005 and double-digit increases in 1990 and 1980.  Even with the slowdown in spending, healthcare spending still comprised 17.6 percent of the GDP in 2009.

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New Republican Congressman Peeved About His 28-Day Wait for Healthcare Coverage

Tuesday, November 30th, 2010

New Republican Congressman Peeved About His 28-Day Wait for Healthcare CoverageWith millions of Americans poised to get health care coverage when the Patient Protection and Affordable Care Act takes full effect in 2014, pity the plight of Andy Harris (R-MD), an incoming Congressman who will represent Maryland’s Eastern Shore in the 112th Congress.  Harris, an anesthesiologist who ran on a platform supporting the repeal of the healthcare reform law, was shocked when he learned that his taxpayer-funded, government-run healthcare plan won’t take effect until 28 days after he is sworn into office on January 3.

According to a congressional staffer, Harris — while attending an orientation session for newly elected members of Congress — “Stood up and asked the two ladies who were answering questions why it had to take so long, what would he do without 28 days of healthcare.  Harris then asked if he could purchase insurance from the government to close the gap.”  His spokeswoman, Ana Nix, said “This is the only employer I’ve ever worked for where you don’t get coverage the first day you are employed.”  To the contrary, waiting periods for employer-sponsored health benefits are common.  The typical waiting period is 90 days and the average is just over two months, according to the Kaiser Family Foundation’s 2009 survey of employer health benefits.

Speaking about President Obama’s healthcare law, which mandates that the majority of Americans purchase some kind of health insurance coverage, Harris said “If we can’t repeal it we’re going to try to change it in such a way to remove the parts that people don’t like.” Harris defeated Democrat Frank Kratovil, who voted against the healthcare law.

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Survey Gives Healthcare Reform Mixed Reviews

Monday, November 29th, 2010

Healthcare ReformAmericans are divided on their perceptions of the Patient Protection and Affordable Care Act’s ability to increase insurance access and control healthcare costs,  according to a recent survey by the Deloitte Center for Health Solutions.  Approximately 59 percent of respondents believe the law will positively impact Americans’ access to affordable insurance.  Another 20 percent said the law’s impact on insurance access will be negative.  Respondents generally believe that the law will reduce insurance, hospital, physician, hospital and drugs costs.

“Since 2008, we have surveyed consumers about their assessment of the U.S. health care system,” said Paul Keckley, Ph.D., executive director of the Deloitte Center for Health Solutions.   “Consumers remain mixed in their assessment of the system’s performance, concerned about costs, and supportive of changes that improve its value.  Our survey findings indicate that the views of respondents are dramatically different based on age,” added Keckley.  “Younger adults tend to be more optimistic about the impact of health reform, while older adults tend to be more skeptical.”

Healthcare costs continue to be an issue.  More than one-third (36 percent) of respondents said they are financially prepared to handle future healthcare costs, compared with 17 percent who say they are unprepared.  Just five percent of young adults 18-24 say they are financially unprepared.  This is likely due to the fact that, under the new law, they can remain on their parents’ coverage until they reach their 26th birthdays.  Consumers think health insurance company costs (70 percent), hospital costs (69 percent) and prescription drugs (61 percent) are major influences on driving overall healthcare system costs.

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Healthcare Leaders Prefer Standardized Payments

Thursday, November 11th, 2010

71 percent of healthcare leaders support standardized payment system. It seems as if the only way to control rising healthcare costs is to create a standardized payment structure.  This is the primary finding of the 22nd Commonwealth Fund/Modern Healthcare Opinion Leaders survey, which studied disclosure and pricing in the healthcare industry.  More than two-thirds of the 190 individuals who responded to the survey – fully 71 percent – said it is “very important” or “important” that “all payers use the same basic method of payment for rewarding quality and efficiency.”

Just 12 percent of survey respondents don’t believe that a standardized payment structure will impact the quality and efficiency of healthcare.  All groups of survey respondents strongly supported the perception of a common payment structure for private insurers.  Fully 72 percent of respondents representing academia and research institutes voiced support for the concept, compared with 79 percent from healthcare delivery organizations, as well as 77 percent form insurers and other health businesses.  A total of 54 percent favor the concept.

Commenting on the study, Louise Probst, Executive Director of the St. Louis Area Business Health Coalition, said “We all know the drill. The American healthcare system seriously underperforms when compared with the health systems of every other industrialized nation.  As a result, each year, large numbers of Americans are harmed or die unnecessarily.  In fact, since the Institute of Medicine’s (IOM) executive summary to its landmark report To Err Is Human was published in the Journal of American Medical Association in September 1999, additional research has only confirmed its findings.  A decade later, the IOM estimate that up to 30 percent of all healthcare expenditures pay for care with little or no health benefit fails to shock. Experts now project that 40 percent or more of all spending has little or no benefit.  Meanwhile, the average cost of health insurance for a family of four has grown to more than $14,000 annually.”

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Medicare Advantage Premiums to Fall in 2011

Thursday, October 14th, 2010

CMS' tough-love negotiations with Medicare Advantage insurers means lower premiums in 2011.The average premiums paid by individuals for private Medicare Advantage plans — which approximately 25 percent of beneficiaries choose — will fall slightly in 2011.  That’s good news, considering that commercial insurance premiums for many people under 65 and some small business are expected to rise between 10 and 25 percent. Insurers blame the new healthcare reform law for the increases, a position that President Barack Obama and Congressional Democrats dispute.

“Despite the claims of some, Medicare Advantage remains a strong, robust option for millions of seniors who choose to enroll or stay in a participating plan,” said Dr. Donald M. Berwick, Centers for Medicare and Medicare Services (CMS) administrator.  Medicare officials negotiated with insurers to hold the line on premiums and co-pays.  “We negotiated more aggressively than in the past,” said Jonathan D. Blum, Medicare deputy administrator.  “As a result, some plans changed their bids to produce more value for beneficiaries.  On average, Medicare Advantage premiums will be one percent lower in 2011 than today.  Medicare Advantage projects that enrollment will increase by five percent in 2011.”

John K. Gorman, a former Medicare official who is now an insurance industry consultant, says the “announcement shows that there is a new sheriff in town.  Medicare officials were very specific and very forceful.  Insurers succumbed to the government’s demands and stayed in the Medicare market because they have become much more dependent on Medicare business.”

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