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Washington announces new terms for Medicare Advantage

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The details of rules governing private Medicare Advantage insurance supplement programs were announced Tuesday, setting in motion the beginning of sweeping changes dictated by the Obama Administration, the Wall Street Journal reported.

Insurers which hope to bid on Medicare business this year will now have to meet tougher standards in their offerings, such as capping annual out-of-pocket costs at $3,400, or charging more than Medicare does for services including home care and dialysis.

The administration will also eliminate approximately 27 percent (roughly 1,400) existing Medicare Advantage plans, in an effort to simplify offerings to consumers.

Insurers will also have to explain, in simpler terms, what coverage gap exists before consumers are required to pay full price for their medications.