Health insurance companies are expecting reduced Medicare Advantage payments to unfavorably impact revenue next year.
The CMS on Friday released its proposed 2014 rates for Medicare Advantage plans, prompting negative reaction from payers and investors. Shares of health insurance plans such as Humana, Universal American Corp. and Health Net took a dive on the news when they opened for trading this morning.
The CMS proposal calls for a 2.2% decline in Medicare Advantage benchmark payment rates.
Humana, which derives most of its revenue from Medicare Advantage, saw one of the largest decreases in its share price. The Louisville, Ky.-based insurer said in a stock exchange filing that it is now anticipating a “mid-single-digit decline” in its benchmark payment rates, after previously stating in its most recent earnings call that it expected rates to be “flat to slightly down.”