United Health Care and Humana...targeting additional membership and profits via Medicare Advantage to raise business levels and growth...and where does AARP stand with all of this...BD
With the commercial health insurance business in the doldrums, UnitedHealth, the nations biggest medical insurer, and Humana, the No. 4 player, have bet heavily on the federal Medicare program. Their biggest gamble involves the lucrative Medicare Advantage part of the business: doctor networks that are managed by the insurers, in contrast to regular Medicare in which members can choose virtually any doctor, who is paid directly by the government.
And if Humana and UnitedHealth have their way, tens of thousands more will be attracted to Medicare Advantage during the enrollment period now under way.....it costs the federal government 12 percent more for each enrollee, on average, than the regular Medicare system.
Like other big insurers, Humana and UnitedHealth are trying to cope with a sales slump in the private-sector parts of their business — as corporate customers in many cases are cutting back on the medical coverage they give employees. Humana has had virtually no growth in commercial members this year, while UnitedHealth’s commercial business had a net loss of 60,000 in the third quarter. But unlike Humana and UnitedHealth, other big insurers have been reluctant to seek growth by climbing out further on the Medicare limb. The others tend to see the government program as a high-risk business, subject to changes in federal payments and procedures. Among the other top five insurers — Wellpoint, Aetna and Cigna — none derive more than 5 percent of their profits from Medicare.
And Humana is transforming itself into a big-time government contractor....AARP concedes a certain contradiction in its positions. By being a partner with UnitedHealth for Medicare Advantage, AARP’s insurance operation benefits from Medicare’s generous payments. “In effect we are arguing for a public policy that is contrary to our own financial interest,” said John Rother, AARP’s public policy director.
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