Taking Advantage of Medicare Advantage

Federal government has been overpaying private insurers.

cash cowFacing government cuts to one of their cash cows—private Medicare plans—health insurance companies have launched a multi-pronged campaign, financed by the customer premiums, to persuade Congress to keep the cuts from going into effect next month.

The industry’s big PR and lobbying group, America’s Health Insurance Plans, is deploying the tactics I described in Deadly Spin to scare seniors into believing that if the federal government stops overpaying insurers that offer Medicare Advantage plans (the private alternative to the traditional government-run Medicare program) seniors will “pay more, get less and lose choices.”

“U.S. Health Insurers Launch TV War Over Medicare Advantage Cuts,” read the headline of a Reuters story last week when AHIP’s ads started running.

At issue is a 2.3 percent cut in payments to Medicare Advantage plans by the Centers for Medicare and Medicaid Services (CMS) that are scheduled to go into effect on April 1.

The industry’s campaign, of course, conveniently leaves out the fact that the government has been overpaying private insurers for years and that the cuts being proposed starting next month are part of a broader effort to put a stop to those overpayments.

Members of Congress inserted a provision in the Affordable Care Act to reduce the overpayments by $200 billion over the next several years.  The 2.3 percent cut would be in addition to that.

It makes little sense for the government to overpay private insurers in the first place, but that is exactly what’s been going on for several years. During the administration of George W. Bush, which supported the privatization of the Medicare program, Congress passed legislation to provide incentives to insurers to offer private plans to compete with traditional Medicare. This enabled the plans to offer richer benefits than traditional Medicare at little or no additional cost to beneficiaries while also making a tidy profit.

It’s little wonder that the number of people enrolled in Medicare Advantage plans has increased rapidly. About one of every five Medicare beneficiaries are now enrolled in private plans. When the government enables you to offer plans with vision and dental benefits, lower copayments and discounts on gym memberships, all at no additional cost, you’re going to be able to lure a lot of seniors from traditional Medicare.

An agent for Humana Inc., one of the biggest Medicare Advantage companies, told me a few years ago that, thanks to the sweet deal insurers have been getting from the government, his job of enrolling healthy seniors in Humana plans was “like shooting fish in a barrel.”

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Taking Advantage of Medicare Advantage

Wrongly Denied Coverage

A Breach of Trust WWII Veteran WifeWWII Veteran known for his integrity and love of family, he worked hard his
entire life to give them the best upbringing and memories he possibly
could.  He taught his young ones to always be honest and to keep their
word without hesitation.  To him, that was ultimately important and his
example served well.

Little did he know, as he raised his children in honor and honesty, that
one day he would be the victim of a breach of trust by one, who should
have been his champion, during a devastating medical crisisHe trusted
and he was betrayed.  Never again shall his life be as once promised.
Deceit won the battle that day, but the truth was not conquered.  Truth
fights on and strives to win the war against those who deny care for
profit and because they can.

Truth and knowledge will bring the deceit and trickery into the light
and hopefully prevent others from being denied proper care at critical
moments.  People deserve better than that.  People should be able to
trust the caregivers and providers.  People deserve the chance to
recover and live on in dignity and with purpose to whatever degree is
theirs to behold.  People should and it is time eyes are opened and the
truth be seen by a population unaware.  It’s time people rather than
profits trump and honesty prevail.

A Breach of Trust is never acceptable and it shan’t be silently tolerated!

Be intolerant — add your voice in objection to deceit and trickery that
wrongfully denies coverage!