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Health insurers launch TV war over Medicare Advantage cuts

WASHINGTON (Reuters) - The health insurance industry is escalating its lobbying battle against a proposed Medicare Advantage pay cut to insurers by launching a television and online advertising campaign to garner public support among the program's 14 million beneficiaries.

America's Health Insurance Plans (AHIP), a leading Washington-based trade group, said a 30-second commercial titled "Too Much" would be shown in a dozen states and the Washington, D.C., area in hopes of dissuading the Obama administration from imposing a 2.3 percent cut in government payments next year.

The commercial, presented by an industry-sponsored group called the Coalition for Medicare Choices, fails to mention that the payment cuts are aimed at insurers, not beneficiaries.

Instead, a woman narrator warns of "$50 to $90 a month in cuts for each of the 14 million seniors who count on Medicare Advantage. Seniors will pay more, get less and lose choices."

Medicare spending is currently a top issue in Washington. The administration is moving forward with billions in program savings under President Barack Obama's healthcare law, while Republicans and Democrats in Congress argue over which party's deficit-reduction strategy would best preserve the 48-year-old program for the elderly and disabled.

The ad also refers to healthcare reform, which is unpopular with many seniors, and the package of automated federal spending cuts known as the "sequester," which seeks a 2 percent cut from Medicare providers, including hospitals.

AHIP declined to say how much the TV campaign would cost.

Medicare Advantage allows beneficiaries to receive Medicare benefits through private insurance plans. The program has long sought to ensure industry participation by paying more than the cost of traditional fee-for-service Medicare.

The 2010 healthcare law seeks to bring Medicare Advantage payments more into line with fee-for-service. Last week, an administration official told a Senate panel that the average payment has already fallen from 114 percent of traditional Medicare costs to 104 percent for 2013.

Administration officials also point to a slowdown in per capita Medicare spending in recent years, which has lowered the rate of growth to a level below that of the general economy.

Meanwhile, insurers say higher payments help Medicare Advantage plans offer more benefits, such as prevention programs, that traditional Medicare does not.

AHIP said the ad began airing Wednesday on cable television in the Washington, D.C., area. Different versions will run on TV or online in Arkansas, Colorado, Florida, Louisiana, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Utah and Virginia.

The Department of Health and Human Services is expected to announce final payment rates for 2014 on April 1.

(Reporting by David Morgan; Editing by Dan Grebler)

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