Medicare Advantage members face big cost hikes

Seniors and disabled people covered by private Medicare Advantage health insurance plans can expect to get hit by steep premium increases this year, a new report says.

Avalere Health, a consulting firm, projects that the average monthly premium this year will reach $39.61, a 14.2 percent increase over the average premium last year. By contrast, the average premium rose by 5.2 percent from 2008 to 2009.

“Premiums are going up -- not just in the individual markets -- but also for Medicare Advantage products,” Lindsey Spindle, a vice president at Avalere Health, said in a statement.  “They fit into a broader trend of increased financial pressure on the insured through rising co-pays and increased premiums.”

Federal subsidies for Medicare Advantage have been reduced several times in recent years as Democrats sought to deemphasize the private program, which grew considerably during the George W. Bush administration, and looked for ways to cut Medicare spending to pay for other priorities, such as a boost in physician payments and and expansion of the Children's Health Insurance Program. The healthcare reform bills pending in Congress would further slash the subsidies.