By Brent Schillinger, M.D.
Palm Beach Post, Nov. 10, 2012
The airwaves, the Internet and newspapers have been loaded with a lot of seasonal advertising. This is not a reference to the political ads that until Election Day seemed to be bombarding us 24/7. I’m talking about the ads urging senior citizens to sign up for a Medicare Advantage program.
The period between Oct. 15 and Dec. 7 has been designated an open enrollment period for Medicare Advantage, which is basically the new name for what used to be known as Medicare HMO plans. Medicare Advantage is a marketing strategy, which suggests that seniors who stay with traditional Medicare are at a disadvantage.
When the legislation was signed into law by President George W. Bush, the Medicare Advantage programs were basically an experiment by the private health insurance companies to say, “The private sector can offer the same benefits as Medicare, only better — and the free market will prove it.”
The Medicare Rights Center, a senior advocacy group, takes a critical position: “The idea behind the plans is to provide better services and lower out-of-pocket costs. However, it doesn’t always work that way.
“While the plans must provide a benefit ‘package’ that is at least as good as original Medicare’s and cover everything Medicare covers, the plans do not have to cover every benefit in the same way. For example, plans may pay less for some benefits, like skilled nursing facility care, and offset this by offering lower co-payments for doctor visits.”
The Medicare Advantage patient may save a bit up front, but in order to maintain profits for the private insurers, the consumer must realize there is usually a sacrifice when it comes to choices that one would have had, had he or she remained in traditional Medicare. There is a whole host of potential problems, such as:
* Care can actually end up costing more, to the patient and the federal budget, than it would under original Medicare, particularly if one suffers from a very serious medical problem;
* Some private plans are not financially stable and may suddenly cease coverage;
* One may have difficulty getting emergency or urgent care, due to rationing
* The plans only cover certain doctors, they often drop providers without cause, and then the continuity of care is broken;
* Members have to follow plan rules to get covered care;
* There always are restrictions in the choices of doctors, hospitals, and other providers, again a form of rationing that keeps profits up for the insurance company bondholders but may limit patient choice;
* It can be difficult to get care away from home;
* The extra benefits offered can turn out to be less than promised;
* The Medicare Advantage plan may ration certain high-cost medications.
In spite of the obvious problems, Congress continued to barrel along, offering incentives and allowing accounting advantages to encourage enrollment in the Medicare Advantage experiment. A recent study published in the International Journal of Health Services calculates that the private insurers have drained over $200 billion in excess payments from the Medicare budget.
How did this happen? Under the funding mechanism, the private plans are paid, on average, 9 percent to 13 percent more than traditional Medicare programs to provide the same coverage. This legislation was a bonanza for the private insurers. So what we are left with are plans that are fraught with problems but are generating profits for the insurance industry. Other than the stockholders, who could argue that paying 9 percent to 13 percent more for the same thing is sound financial thinking?
Perhaps taxpayers need to question whether they should be financing an experiment that costs billions more than it would have if people had remained in traditional Medicare. The Affordable Care Act, known as Obamacare, takes some preliminary steps to fix this flawed reimbursement formula, but only time will tell how that will play out.
For the senior consumer as well as the practicing physician, it’s a confusing state of affairs. For the doctors, learn as much as you can about the options. For the patients, start by speaking with your physician. He or she should be able to guide you in the best direction. For additional information visit www.pbcms.org.
Brent Schillinger, M.D., is president of the Palm Beach County Medical Society Services Foundation.