Cut waste, fraud and abuse.

Guide to Health Reform (Part 1): Each year the Center for Medicare and Medicaid Services (CMS) announces planned payment increases or decreases to contracting Medicare Advantage plans.  In 2009, Medicare announced a 4.8% decrease in payment that resulted in several hundred health insurance companies canceling their contracts, raising premiums and increasing copayments - - forcing millions of seniors to find new coverage. Democrats have claimed all along that privately administrated Medicare Advantage plans are wasteful and have made them a prime target for major cuts. Many seniors across the country have already felt the impact of targeted cuts to Medicare.  Health Reform promises to further reduce payments to Medicare Advantage Plans, Doctors and Hospitals.  This will be accomplished by reducing the dollar amount of each "fee-for-service" and supplement it with a payment program based on "quality".  These cuts will undoubtably have an impact on the premiums and cost sharing in existing Medicare Advantage and Medicare Supplement policies.

Private Medicare plans, a major source of business for many health insurers, may see a small increase of 1.38% in funding from the federal government for 2011. (rates released Friday, February 19th).

These estimates are preliminary, final rates will not be published until early April.  Wall Street and the Analyst community all have mixed reactions, but last year's reduction in payment (4.8%) to private Medicare plans resulted in upwards of nearly 50% increase in premiums to Medicare Advantage plan members for 2010.  The average health plan receives about $900 per member per month and these cuts resulted in a reduction in revenue of nearly $45 per member per month. Many insurers simply passed the loss onto their members through rate increases.