"The premiums don't tell the entire story."


Over the summer, federal officials denied proposed rate hikes for 298 out of 2,100 bids from private insurers hoping to offer Medicare Advantage plans. As a result, the administration gets to claim that premiums went down slightly—by about 1 percent. But as The Wall Street Journal reports, that doesn't mean that seniors enrolled in those plans will be getting the same coverage for less. Instead, in many instances, they'll be getting less coverage, and, in many cases, facing increased copays and deductibles. And some plans might simply cease to operate:

The move may carry some downsides. Mr. Gorman [an insurance industry consultant] said that in some cases, the insurers were forced to run their plans at a loss. While it was generally too late for them to withdraw from Medicare Advantage for 2011—only a handful did—more might drop out for 2012 and force their customers to look for another plan.

Mr. Gorman said some of the approved plans cut benefits such as gym memberships and dental coverage, while raising co-payments for emergency-room visits and reducing prescription-drug coverage.

"The premiums don't tell the entire story," said Joshua Raskin, an analyst at Barclays Capital who covers insurers. "That doesn't necessarily mean they are getting the same benefits and network breadth."

For those who've been following the health insurance battles in Massachusetts, this is relatively tame version of a familiar story: The government rejects new premium rates, insurers end up operating at a loss, major headaches ensue.  And as the new health care law rolls out, and similar price control policies pop up in other states, it's likely to become even more common across the country.