Carriers face Medicare Advantage cuts

(AP Photo/Brian Bohannon, file)

Feb. 22 (Bloomberg) — Health insurers participating in the Medicare Advantage program for elderly Americans, including Humana Inc. and UnitedHealth Group Inc., face a base payment cut of about 3.55 percent next year, the U.S. government said.

The payment reductions proposed yesterday are subject to negotiations with the industry and aren’t expected to become final until April 7. Insurers have predicted total cuts to the program, including additional adjustments, will be as much as 7 percent. A lobbying campaign to minimize the cuts had begun already, including a Feb. 14 letter to the administration from 40 senators urging the government to freeze Advantage rates.

“The final cut may be bigger, as the proposed rate doesn’t take into account adjustments required by the Affordable Care Act,” Michael Manns, a Bloomberg Industries analyst, said in a telephone interview.