By Patrick Yoest
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Managed-care companies could drop their private Medicare plans if payments to the plans from the federal governments drop through a bidding process, the head of a Medicare oversight panel said Friday.
Mark Miller, executive director of the independent Medicare Payment Advisory Commission, told reporters Friday that a proposal by the White House to save $177 billion over ten years by putting a competitive bidding process into effect for Medicare Advantage plans likely would have the effect of taking some of the programs out of the market.
Miller stipulated that he had not seen the details of the White House proposal, but that the bidding portion of proposal likely would bring lower payments to managed-care companies appreciably, bringing them closer to what Medicare pays for its own fee-for-service structure.
"You should assume, and we have made this very clear in our own work, there will be fewer managed-care plans and the generous benefit packages that they have right now will be less generous," Miller said.
While Miller's assertion is not controversial, it comes at a time when managed care companies and investors are especially concerned about the implication of the White House proposal on their bottom lines. Companies with Medicare Advantage components include Humana Inc. (HUM), Aetna Inc. (AET) and Wellpoint Inc. (WLP).
"The Obama Administration has sent a clear shot across the bow that it holds a deep skepticism towards [Medicare Advantage]," said Deutsche Bank research analyst Scott Fidel in a note to investors. "This also seems in line with the new Administration's approach to economic policy so far which has shown a strong faith in using the government as an activist force around economic policy."
In a conference call with reporters Thursday, a senior White House Office of Management and Budget official sought to alleviate worries about the effect of the proposal on managed-care companies and Medicare beneficiaries.
"We expect there will be a great deal of competition and we expect there will be changes, but we are optimistic that market forces will help to bring down costs and keep as many Medicare Advantage plans in the system as possible," the official said.
-By Patrick Yoest, Dow Jones Newswires; 202-862-3554; patrick.yoest@dowjones.com
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Publié le 27 Février 2009 Copyright © 2009 Dowjones