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HealthSpring: Medical Costs Remain High

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A Medicare Advantage carrier says it is spending more than it had hoped on paying members’ claims.

HealthSpring Inc.. Nashville, Tenn., says the unexpectedly high medical cost trends its Medicare Advantage plan members incurred in the first quarter have continued in April and May.

HealthSpring still expects to report a profit for the year, but the medical loss ratio for the second quarter probably will exceed 82.5%, which is above the target of 80%, the company says.

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Outpatient and emergency room charges have been higher in all of the markets the company services, and in-patient hospital admissions have been higher than expected in Texas, the company says.

The company, which has about 121,000 Medicare Advantage plan members and 15,000 commercial plan members, says it is trying to analyze the reasons for the high claims ratio and will be cutting costs by getting out of the individual and small employer markets Nov. 1.

HealthSpring had been planning to give a presentation today at a health care conference organized by a unit of Goldman Sachs Group Inc., New York, but it decided not to give the presentation, the company says.