U.S. government proposes 1.84 percent hike in 2019 payments to Medicare insurers

Reuters News
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Posted: Feb 01, 2018 4:50 PM

NEW YORK (Reuters) - The U.S. government on Thursday proposed an increase of 1.84 percent on average in its 2019 payments to the health insurers that manage Medicare Advantage insurance plans for more than 20 million elderly or disabled people.

UnitedHealth Group Inc, Humana Inc, Aetna Inc and WellCare Health Plans Inc are among the largest players in the Medicare Advantage market in which private insurers are paid a set rate by the government to cover member healthcare costs.

The government payment rates affect how much insurers charge for monthly healthcare premiums, plan benefits and ultimately, how much they profit. The 2019 proposal expands the benefits that insurers can offer in the plans to include items like wheelchair ramps and devices to diminish the impact of health conditions.

The proposed rate was within analyst expectations, and insurer shares for the previously mentioned companies were little changed on the news in after hours trading.

Kim Monk, managing director of company and investing research group Capital Alpha Partners, said the proposed payment rate appeared to be within her expectations for an increase of 1 percent to 2 percent.

The government will finalize the rate in April after a public comment period during which it will consider making changes to the payment formula that could raise or lower the ultimate rate.

(Reporting by Caroline Humer; Editing by G Crosse and Chris Reese)