The feds have proposed paying a little more to insurersparticipating in Medicare Advantage in 2017.

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The Centers for Medicare and Medicaid Services announced aproposed rate hike of 1.35 percent for 2017, an increase that a CMSofficial told the Wall Street Journal represented “modest butstable growth” for insurers that offer plans through theincreasingly popular private sector version of Medicare.

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CMS explained that the increase was mostly geared towardscovering anticipated increases in the cost of health care.

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In a statement, Marilyn Tavenner, CEO of America’s HealthInsurance Plans, did not indicate whether she believed the proposedrate hike was big enough, but emphasized the importance ofsupporting the program.

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“It's critically important that the agency finalize policiesthat ensure the long-term stability and continued growth of theprogram for millions of beneficiaries who depend on MedicareAdvantage for their coverage,” she said.

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Medicare Advantage has grown steadily in the 18 years sinceits creation, as a larger percentage of the ever-growing populationof U.S. retirees is opting for the alternative to traditionalMedicare. The growth makes the Medicare market irresistible toinsurers, despite the fact that the federal government cut $150billion out of the program as part of the Patient Protection andAffordable Care Act.

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In contrast to the relatively small, politically-vulnerablePPACA marketplaces, Medicare remains a sure bet forinsurers. It’s a huge market that few politicians have devised anymeaningful steps to dismantle. Furthermore, attempts tosignificantly alter Medicare, including through shifting from adefined benefit to vouchers, would very likely be to the insurers’advantage.

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