Private insurers depleting Medicare Trust Fund
Methods Used by Insurers Are Questioned
By Robert Pear
The New York Times
May 6, 2007
Insurance companies have used improper hard-sell tactics to persuade Medicare recipients to sign up for private health plans that cost the government far more than the traditional Medicare program, federal and state officials and consumer advocates say.
Insurance agents, spurred in some cases by incentives like trips to Las Vegas, have aggressively marketed the private plans, known as Medicare Advantage plans. Enrollment in them has skyrocketed in the last year, and Medicare officials foresee continued rapid growth in the next decade.
Proponents of private plans say they are indisputably good for many older Americans because they coordinate care and may offer extra benefits, like discounts on eyeglasses, hearing aids and dental care.
But federal officials said that the fastest-growing type of Medicare Advantage plan generally does not coordinate care, does not save money for Medicare and has been at the center of marketing abuses.
These “private fee-for-service plans” allow patients to go to any doctor or hospital that will provide care on terms set by the insurer. In most cases, no one manages the care. And some patients have found that they have less access to care, because their doctors refuse to take patients in private fee-for-service plans.
Moreover, those plans may be more expensive than traditional Medicare for some patients, because the co-payments for some services may be higher. The Medicare Payment Advisory Commission says that the cost to the government is also higher because it pays the private fee-for-service plans, on average, 19 percent more than the cost of traditional Medicare.
Richard S. Foster, chief actuary for the Medicare program, said “the additional payments to Medicare Advantage plans, above and beyond the costs” of traditional Medicare, were causing higher premiums for all beneficiaries and speeding the depletion of the Hospital Insurance Trust Fund for Medicare.
http://www.nytimes.com/2007/05/07/washington/07medicare.html?pagewanted=all
Comment:
By Don McCanne, MD
Why would the private fee-for-service Medicare Advantage plans engage in abusive sales practices? The answer is obvious. There is tremendous profit in these plans.
In the traditional Medicare program, profits for health plans are not a consideration since middlemen do not even exist. Nor does the traditional Medicare program need to deal with marketing expenses and other superfluous administrative excesses.
Congress insists that private plans are necessary to help prevent the “bankruptcy” of the Medicare Hospital Insurance Trust Fund. Yet their private solution for a government problem, according to Medicare’s own actuary, is speeding up the depletion of the Trust Fund.
We are being inundated with proposals to avoid the inevitability of “Medicare for All.” Policymakers are going to extremes to devise methods of keeping the private plans in play. They keep their blinders on because they don’t want to face the reality that it is now impossible to design individual private plans that provide adequate protection while remaining affordable.
The private insurers are bad people who are taking hugh amounts of funds that should be going toward patient care. They can no longer be dismissed with sterile comments about the market advantages of the private sector business model of financing health care. The profitable reports that the private insurers submit to Wall Street should no longer be allowed to gloss over the theft of our public Medicare funds.
And that applies to the theft of our private insurance funds as well, even if we are remaining complicit by our inaction.