Wall Street will be watching when the federal government unveils its final Medicare Advantage rates for 2010 after markets close today, nearly two months after insurance stocks sank following the release of preliminary rates.
Wachovia analyst Matt Perry said in a Friday research note he expects reimbursement from these plans to decline “meaningfully” in 2010. The impact on an insurer’s overall earnings will depend on the size of the company’s Medicare Advantage business.
Louisville, Ky.-based Humana Inc., for instance, has 1.4 million Medicare Advantage customers, or about 12 percent of its total enrollment. Perry said in his note he expects Humana to be one of the insurers hardest hit by the rate.
He expects Indianapolis-based WellPoint Inc., parent of Anthem Blue Cross Blue Shield of Connecticut, and Hartford-based Aetna to see smaller earnings reductions.
Medicare Advantage allows the elderly and disabled to receive benefits through plans offered by private health insurers. These plans receive a government subsidy and generally offer more benefits than traditional Medicare.
The Centers for Medicare and Medicaid Services said in February the national, average monthly payment rate per capita for Medicare Advantage plans would rise half a percent for 2010. Actual rates for these plans vary by county, and they’re also adjusted depending on a patient’s health.
Several insurance stocks sank sharply after the increase proved to be smaller than analysts expected. (AP)
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