Medicare payments for 2016 will be increased according to regulators
IN PHOTO: A view of the UCLA Medical Center in Los Angeles, California March 19, 2015. UCLA, the hospital at the center of the "superbug" outbreak that killed two people and infected seven last month has received poor patient safety scores and had its payments cut by Medicare for high rates of hospital-acquired infections. REUTERS/Lucy Nicholson

The US government has announced on Monday the increase in 2016 payments made to insurance providers selling private Medicare plans. The payments have gone up, making changes to the decline proposal in February.

According to the announcement, payments for 2016 Medicare Advantage health plans for the disabled and elderly will go up by 1.25 percent. The announcement made by the Centers for Medicare and Medicaid Services, or CMS, a health and human services division – followed after the announcement of the proposed 0.95 percent Medicare cuts in .

CMS said that the change in the estimated increase rate comes from several factors, including higher spending due to hospitalsations. According to a Barclays analyst Joshua Raskin, the changes on the payments brings out a favourable outcome as opposed to the February proposal for cuts. Beneficiaries of this health care program, which are usually the senior citizens and disabled, can choose to enjoy these private healthcare alternatives over the traditional government-sponsored coverage.

Medicare is a great opportunity for the insurance industry to grow since there are now more citizens reaching the age of 65, the qualifying age of the health care program. Experts say that the 2016 increase in payments will allow insurers to make their offers more attractive. The benefits also become more abundant, entailing lower costs for beneficiaries.

Payments for the health program have become a yearly political issue since insurers constantly petition to keep the payments from declining, and they end up successfully heard and supported by lawmakers. Ana Gupte, an analyst at Leerink Partners, said that the increase in payments would mean “nice growth” for the health care programme compared to the previous years. Insurers that sell Medicare Advantage plans will also expect growth for their company.

Based on the records from the consulting agency Avalere Health, there are around 17 million people enrolled in Medicare Advantage plans, an increase in the number from 15.9 million in the previous year and 12.2 million from 2011.

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