Health insurance stocks are wobbling after data released by the federal government pointed to possible steep Medicare Advantage payment cuts in 2014.

Analysts who follow the industry say those cuts could filter down to Medicare Advantage customers in the form of premium hikes, reduced benefits or fewer choices. But they also say the government will likely soften any potential reimbursement reductions between now and April, when final rates are announced.

Medicare Advantage plans are privately run versions of the government's Medicare program that covers the elderly and disabled people. They provide basic Medicare coverage topped with extras like vision or dental coverage or premiums lower than standard Medicare rates.

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