“Federal government paying insurers billions more than necessary: Kaiser,” by Tami Luhby, CNN Politics

“The Kaiser Family Foundation found that seniors who enroll in Medicare Advantage typically spent $1,250 less in the year before they switched to an insurer-run plan, compared to those who remained in the traditional program, according to the report that was published Tuesday. They also used fewer health services, even if they had medical issues such as asthma, breast or prostate cancer and diabetes, than their peers in traditional Medicare. This means that the federal government may be overestimating the expected costs of Medicare Advantage enrollees, who may be healthier than their counterparts in traditional Medicare. Adjusting the payments to more accurately reflect costs could have major implications.”

LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform):

Government draws private sector firms into new programs with attractive reimbursements, then ratchet down payments until quality declines or companies depart. MA may prove yet another example.