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Premiums jump 14 percent on Medicare private plans

WASHINGTON - Millions of seniors who signed up for popular private health plans through Medicare are facing sharp premium increases this year - another sign that spiraling costs are a problem even for those with solid insurance.

A study released Friday by a major consulting firm found that premiums for Medicare Advantage plans offering medical and prescription drug coverage jumped 14.2 percent on average in 2010, after an increase of 5.2 percent the previous year. Data analysis firm Avalere Health produced the statistical study.

Some 8.5 million elderly and disabled Americans are in the plans, which provide more comprehensive coverage than traditional Medicare, often at lower cost.

The Avalere findings are bad news for President Barack Obama and his health care overhaul that is bogged down in Congress. That's because the higher Medicare Advantage premiums for 2010 followed a cut in government payments to the private plans last year. And the Democratic bills pending in Congress call for even more cuts, which are expected to force many seniors to drop out of what has been a rapidly growing alternative to traditional Medicare.

Republicans have seized on the Medicare Advantage cuts in their campaign to derail the health care bills, and seniors are listening. Polls show seniors are more skeptical of the legislation than the public as a whole, even though Democrats would also reinforce original Medicare by improving preventive benefits and narrowing the prescription coverage gap.

The report on Medicare comes after a series of double-digit premium increases around the country for privately insured working households who buy their own coverage. Obama has cited those increases as an argument for reviving his stalled health care overhaul plan.

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