The federal government pays private insurers a per-capita fee to manage Medicare Advantage benefits. The Obama administration plans to cut those extra payments to insurers by about $150 billion over the next 10 years to help pay for the health law. Some experts expect enrollment in Medicare Advantage plans to decline sharply if that occurs.

From The Wall Street Journal (headline: UnitedHealth Culls Doctors From Medicare Advantage Plans - Physicians in 10 States Notified; Insurer Cites 'Funding Pressure' From Federal Government):

UnitedHealth Group Inc., the nation's largest provider of privately managed Medicare Advantage plans, has dropped thousands of doctors from its networks in recent weeks—spurring protest from lawmakers and physician groups and leaving many elderly patients unsure about whether they need to switch plans to keep seeing their doctors.

Doctors in at least 10 states have received termination letters, some citing "significant changes and pressures in the health-care environment." The notices also tell doctors they can appeal within 30 days. That means many physicians and patients won't know for sure who is in or out of UnitedHealth's Medicare Advantage networks before the open-enrollment period to switch Medicare plans ends on Dec. 7.

 

Medicare Advantage, an alternative to traditional Medicare, combines hospital and doctor coverage and often includes prescription drugs and perks like gym memberships. Enrollment has more than doubled since 2004 to 13 million in 2012, which represents about 27% of Americans on Medicare.

The federal government pays private insurers a per-capita fee to manage the benefits. The rate is currently about 12% more than the average Medicare patient spends annually. The Obama administration plans to cut those extra payments to insurers by about $150 billion over the next 10 years to help pay for the health law. Some experts expect enrollment in Medicare Advantage plans to decline sharply if that occurs.

 

Other Medicare Advantage providers, including Humana Inc., Aetna Inc. and WellPoint Inc., said they are always evaluating their provider networks, but doctor groups say none appear to be shrinking them to the extent of UnitedHealth.

UnitedHealth is the biggest player, with nearly three million members in Advantage plans, many of them sold under the AARP brand.

 

Depending on their plan, UnitedHealth Medicare members may be able to see terminated doctors if they pay an out-of-network fee or pay 100% of the cost themselves. They can also switch to a rival Advantage plan or to regular fee-for-service Medicare—if they do so by Dec. 7.