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Insurer Stocks Slip Over Possible Medicare Advantage Cuts


What: Health insurance stocks wobbled Tuesday after data released by the federal government pointed to possible steep Medicare Advantage payment cuts in 2014, which could lead to reduced coverage or fewer options for people buying the plans. The Centers for Medicare and Medicaid Services said Friday after markets closed that it expects costs per person for Medicare Advantage plans to fall more than 2 percent in 2014, a bigger drop than many analysts who cover the industry anticipated.

Why:  Medicare Advantage plans have claimed to save the government money but in fact have been incredibly profitable for private insurance companies. As part of the healthcare reform, these plans are expected to see some fairly significant cuts in reimbursement.


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