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Insurer stocks slip over possible Medicare cuts

San Francisco Chronicle / Associated Press, February 20, 2013
Health insurance stocks wobbled Tuesday after data released by the federal government pointed to possible steep Medicare Advantage payment cuts in 2014, which could lead to reduced coverage or fewer options for people buying the plans. The Centers for Medicare and Medicaid Services said Friday after markets closed that it expects costs per person for Medicare Advantage plans to fall more than 2 percent in 2014, a bigger drop than many analysts who cover the industry anticipated. The government uses the figure as a benchmark to determine payments for these privately run versions of the government's Medicare program that covers the elderly and disabled people, and analysts worry that this might lead to big payment cuts.