Is There Any Future For Medicare Advantage?

Online, December 16, 2011 (Newswire.com) - It was in the news recently that Medicare Advantage Plans would be paid less money by Medicare in 2013. The Low-cost Protective Act will restrict the costs related to administration to 20% of the total revenues.

Medicare Advantage plans are not liked by the Left Wingers since they take it as privatization of Medicare by turning it over to private insurance companies.

The Republicans fear that Left Wingers would get rid of Medicare Advantage and this would thus hamper the lives of more than 13 million American citizens.

Several studies have claimed that Medicare Advantage has no future and it would soon disappear because of the funding reductions.

In Mexico, the enrolment in Medicare Advantage plans is quite high. Also, in counties like Pinal and Gila, almost 54% of the people are a part of Medicare Advantage. Residents of Mexico are really concerned about the future of Medicare Advantage. Should they really be concerned?

Why insurance companies are still investing in a business that is going down in a few months?

UnitedProtection Group will take over ABHealth Corp, "an insurance company that deals in insurance plans for Medicare recipients with special requirements, including chronic illness", according to CNN report.

According to CNN:
ABHealth Corp has about 200,100 Advantage plan members in 5 states of U.S. and is expanding to 7 in a few months. It is estimated that its revenue for 2013 will exceed $3 billion.

UnitedProtection is certainly one of the largest insurance providers of Advantage plans, with more than 3 million members. Its revenue is expected to reach $110 billion next year.

Medicare has always been luring for U.S health insurers. Medicare Advantage plans now account for 30 percent of total Medicare enrollment, compared with 70 percent for government plans. This percentage is expected to rise in about few months.

Sedna Corp decided to take over Healthyway Inc few months back for $3 billion in order to expand its presence in the field of Medicare Advantage.

The largest insurance companies in United States seem to be aware of something that we all don't know. Somehow, they still feel that Medicare Advantage will continue being a profitable business for them in the near future.