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Watch out for unwelcome surprises this Medicare open enrollment period

Watch out for unwelcome surprises this Medicare open enrollment period

By Thomas Lane and Lin Brown, M.D.
New Hampshire Bulletin, Oct. 25, 2024

This fall, countless New Hampshire seniors will be reexamining their Medicare coverage options for 2025 during the open enrollment period, which runs from Oct. 15 to Dec. 7. One of us, Thomas Lane, is far from Medicare eligibility age, but as a health economist, he is frequently asked by friends and family about what plan they should choose. After all, health insurance is complicated, and it’s very hard to find unbiased advice.

Usually, Thomas responds to the question with a question of his own: What kind of a plan are you considering?

Often, the response is some sort of a Medicare Advantage plan, and every time, he is shocked at how little folks know about the risks associated with signing up for that program instead of Original Medicare. Seniors should know that while Medicare Advantage may sound enticing in the advertising that blankets the airwaves each fall, it’s better known as “Medicare Disadvantage” because it can expose you and your family to big risks.

Dr. Lin Brown is both a physician and a Medicare beneficiary. As a physician, she considered herself knowledgeable and modestly intelligent, which she assumed would allow her to make a wise choice for her first Medicare plan. The initial allure of Medicare Advantage sucked even her in. The ads promised lower rates and more services! Who could resist? She is also healthy, minimizing the risk she would need complicated care. However, she soon realized she had made a mistake.

First of all, what is Medicare Advantage? Its formal name is Medicare Part C, and it serves as a single-package replacement for Medicare parts A (hospital care); B (physician services); and D (prescription drugs). However, it’s deceptively named because it isn’t real Medicare.

Original Medicare (Parts A and B) is operated by the federal government, while Part C is essentially just heavily subsidized private insurance that companies are allowed to label Medicare. Part D is operated by private companies. Insurers often try to make Medicare Advantage plans seem like a sweet deal through lower premiums and extra benefits like hearing and dental not covered under Original Medicare, but as the saying goes, putting lipstick on a pig doesn’t change the fact that it’s still a pig.

Under Original Medicare, there is little question about what care will be covered, a fact doctors like Dr. Brown appreciate because it means less paperwork for them and more time to provide actual care. But because Medicare Advantage isn’t real Medicare, private insurers can play all sorts of games to boost their profits by delaying or denying care. Often, this is through what is called a prior authorization, or extra paperwork for your doctor, forcing them to extensively justify why you need the care they seek to give you.

For Dr. Brown, this meant that in her practice, prior authorizations were the rule, not the exception. They wasted valuable physician practice time and delayed care. For you as a patient, this means that should a major issue or even an emergency arise, your insurer may turn around and surprise you by claiming the care your doctor says you need isn’t “medically necessary” and refuse to pay for it. Dr. Brown and her physician colleagues do not appreciate that there are two types of Medicare, especially given one of them works so well and the other does not.

Medicare Advantage denials are becoming increasingly common. Just between 2022 and 2023, denials skyrocketed by 55.7 percent. They also tend to be quite arbitrary; the reviewer, who has never met the patient, may not even read the patient’s records but deny care anyway. Increasingly, denials aren’t even done by real people, let alone clinicians, and are being taken over by poorly designed AI algorithms that are notoriously erroneous; 82 percent of denials that are appealed are overturned, showcasing the poor quality decision-making that goes into them. But just 11 percent of denials get appealed because many patients aren’t aware they can appeal or don’t want to undergo the burdensome process.

Delays and denials are more than just inconvenient. They can worsen illness and even kill. But, they are a great way for insurers to boost their profits. Obviously, we all hope to never have a health emergency, but should one occur, Medicare Advantage may well stand in the way of you getting the care you need.

Dr. Brown herself experienced a related issue when she was a Medicare Advantage beneficiary. She was disappointed when her plan really did not cover anything related to her hearing aids, since the care was “out of network.” And it covered nothing on a crown from her dentist, also “out of network.” In order to maximize their profits, Medicare Advantage plans tend to have limited and unclear provider networks that allow them to dodge responsibility for patient health needs. Original Medicare, in contrast, covers almost all providers.

Medicare Advantage is so heavily advertised because private insurers make lots of money on the program. Unfortunately, they often do so by gaming the system, siphoning off our tax dollars by exaggerating the health needs of covered patients to the tune of $88 billion to $140 billion annually. Dr. Brown experienced this too, with her Medicare Advantage plan insisting that she and her husband receive a nurse visit. This was likely so that her plan could add diagnoses to their health records, which enable them to receive higher government subsidies.

Most private health insurers in the program have been accused of fraud and are starting to face some accountability in the form of lawsuits and investigations to recoup overpayments, but there is little chance that all of the lost money will ever be recovered. Private insurers have been fighting accountability for years, exemplified by recently released court records that show how they pressured the Obama administration into killing proposed regulations in 2014 that sought to reduce overbilling. Unsurprisingly, these efforts continue to this day.

As a young person, this is what makes Thomas especially upset. He’s happy to pay his taxes and contribute to the care of all the incredible seniors in his life, but watching that money disappear into the Medicare Advantage money-incinerating bonfire for no good reason is depressing, to say the least. It also endangers Medicare’s solvency and decreases the chance that it will be there for him when he eventually becomes eligible.

To make matters worse, New Hampshire seniors on Medicare Advantage are facing even bigger difficulties than their peers nationwide. Insurers are so upset over even the limited scrutiny and declines in their profits that they have begun to face that some of them are now pulling back from a number of states, one of which is New Hampshire. Over a million seniors have been dumped by their Medicare Advantage plans as a result.

You’re likely asking yourself: This sounds awful, so how do I avoid this? The safest route to reliable health insurance coverage that will keep you protected in the face of whatever life may throw at you is Original Medicare. However, because the Original Medicare coverage package was designed all the way back in the 1960s when medical care was much simpler, you will likely need to bolster it with additional coverage, such as a Part D plan and/or Medigap policy. Supplemental plans are private insurance plans just like Medicare Advantage, but they are regulated through different mechanisms and entail somewhat less risk for patients.

Why is Original Medicare the safest option for all seniors and not just those who have significant medical needs?

Because Medicare Advantage premiums are generally cheaper than the alternatives, some wonder why not start on Medicare Advantage and then switch to traditional Medicare later on when health risks are higher. Theoretically, this may be possible for some. However, switching back to Original Medicare after starting out on Medicare Advantage is quite risky because supplemental policy insurers can take into account preexisting conditions, leaving you with much higher premiums or even a refusal to insure.

Dr. Brown experienced this, too. Due to a hiccup with her pension plan, she needed to rethink her Medicare enrollment and reached out to a Medicare navigator for help. He guided her to Original Medicare, but switching back was not easy. A lengthy health evaluation was required to determine her premium. She was lucky that she remained healthy and was able to make the switch.

Starting on Original Medicare plus supplemental insurance tends to cost a bit more per month in premiums than Medicare Advantage, but it is the only way to ensure you will have quality and affordable coverage later on in life when the risk of a significant health need is unavoidably greater. In the long run, it may even be cheaper, too. Do yourself a favor and stay away from Medicare Disadvantage.

Thomas Lane is a health economics, policy, and management master’s student at the Karolinska Institute in Stockholm, Sweden. He recently graduated with a bachelor’s in economics and public policy from Dartmouth College in Hanover, New Hampshire. There, he was a member of the steering committee of Granite State Physicians for a National Health Program.

Lin Brown, MD, FACR, MACP is a retired rheumatologist from Dartmouth Health. Over the years she has practiced as a rheumatologist, a section chief, a fellowship program director for training rheumatologists at DH, and the coordinator of the rheumatology course at Dartmouth Geisel School of Medicine. A member of Granite State Physicians for a National Health Program, she is now almost fully retired.

https://newhampshirebulletin.com…

Half Measures Won’t Cure Health Insurance

Two prominent health economists get the health insurance story half right: cost-sharing doesn’t control system costs and harms patients. But they miss the lesson that “very basic” coverage lacks a functional real-world version … what actually works (for equity, effectiveness, & efficiency) is universal comprehensive coverage.

The Only Way to Fix US Health Care, Review of: We’ve Got You Covered: Rebooting American Health Care (Einav & Finkelstein), New York Review of Books, Oct, 16, 2024 online, Nov. 7 print, by Adam Gaffney, David U. Himmelstein, and Steffie Woolhandler

“We take it back,” Liran Einav and Amy Finkelstein, two of America’s most prominent health economists, declare in a new book, We’ve Got You Covered, their blueprint for reforming our health care system. After years of preaching “the gospel” that “patients must pay something for their care,” they’ve now abandoned the message. Instead they propose tax-funded “basic” health coverage—without copayments, deductibles, or other forms of “cost-sharing”— for all Americans. …

Most workers in the US once enjoyed first-dollar coverage for much of their care: in 1982, for instance, only 30 percent of private plans had a deductible for hospital stays. Today 90 percent of private sector workers with job-based individual coverage face a deductible that averages $1,735 a year. Some states have even sought waivers to increase out-of- pocket payments for impoverished Medicaid recipients. …

Yet reams of evidence confirmed what our patients (and physician colleagues) regard as common sense: copays and deductibles cause people to skip needed care and hence suffer poorer health, and even mortal consequences. …

And while copayments and deductibles discouraged care seeking, they didn’t constrain health care spending, which rose from $1,000 per person in 1980—equivalent to spending in other wealthy nations—to $13,493 in 2022, more than double the OECD average. …

As “skin in the game” lost its cachet, the big insurers pivoted to other profit-maximizing strategies. For instance, many now focus on privatizing Medicare and Medicaid. Some employ doctors directly and use penalties and bonuses to motivate them to minimize expensive care. Those shifts—along with an ever-growing body of data on medical harms—have perhaps changed the intellectual climate for economists to one more tolerant of jettisoning cost sharing.

However, if Einav and Finkelstein  … have finally gotten some important things right, they continue to miss the mark on others: they embrace a two-tiered medical system and ignore … the corporate takeover of health care. These are related issues. Treating medical care as a market commodity like microchips or microwaves supports the dual falsehoods that copays benefit society and that market-driven corporatization breeds efficiency and quality. …

Einav and Finkelstein now rightly conclude that more patches won’t work; we have to start from scratch. “Basic coverage,” they write, “must be provided automatically, and financed by the taxpayer.” But their support for tax-funded universal coverage comes with a caveat: to be affordable, the public coverage “should be very basic”—worse than current coverage— with “longer wait times, less patient choice.” It should leave “patients and their physicians not at liberty to get any medical care they both want, as they are currently under Medicare.”

The very concept of “basic coverage” rests on economic and medical fallacies; there is no workable definition of the “basic” or “minimalist” care. Einav and Finkelstein propose that would simultaneously slash spending and provide medically adequate care. There is useless care, to be clear, like ineffective drugs or unneeded surgeries. …

In the realm of effective care, there is no circumscribable “basic” category that can be safely carved out of coverage. …. “Minimalist coverage,” in practice, means greater disability and shorter lives.

Recognizing that the affluent wouldn’t abide “basic coverage,” Einav and Finkelstein would allow “top-up,” or supplemental, coverage in a higher tier. Of course, imposing long lines on working-and middle-class Americans while letting the rich jump the queue isn’t just inequitable; it’s medically hazardous…. But a simpler, more efficient, healthier, and fairer alternative has long been available: universal single-tier coverage.

… Scientific practice and supply planning can more safely and effectively constrain overuse than copays and two-tiered medicine.

Einav and Finkelstein leave the door open for MA-type plans to serve as the chassis for their universal coverage system (they describe basic coverage “offered by private firms” as one potential reform structure) … Medicare for All can’t accommodate patients’ varying “tastes for medical care.” …

The United Kingdom NHS experiment underscores two lessons most economists haven’t learned. A rationally planned, publicly financed and owned health care system can provide free and comprehensive care without causing runaway costs. But diluting the system with top-up coverage and market incentives undermines its political, economic, and medical foundations.

Another system of US health care— without medical debt, insurance hassles, red tape, corporate predation, copays, punishing deductibles, and paltry care—is possible, not to mention that support for it is hugely popular. Achieving such a system will require a new economics of care, one that moves past outdated economic orthodoxies, divorces medicine from commerce, and provides care on the basis of needs, not means.

Comment:

By Jim Kahn, M.D., M.P.H.

This eloquent essay interprets the arc of post-WWII health insurance in the US (largely private, highly dysfunctional) and UK (universal public basis, but private sector-contaminated and hobbled). It’s a fine primer and resource, laying out a cogent argument that the Einav-Finkelstein proposal is an inadequate half-solution.

HJM has written previously about this book, here & here, raising similar concerns about the proposed tiered system. The new essay places these critiques into a highly instructive historic context.

When will US health economists learn *all* the right lessons? Not just to abandon the misguided idea of “skin in the game”, but also to replace profit-driven market strategies with justice-driven and efficient universal public coverage? Single payer.

https://healthjusticemonitor.org…

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Project 2025 Threatens Full Privatization of Medicare—A Death Sentence for Millions

Despite the overwhelming evidence showing that privatized Medicare does not serve our seniors’ best interests and wastes money, Project 2025 wants to take over all of Medicare by automatically enrolling seniors in corporate insurance plans without their full consent.

By Diljeet Singh, M.D., Dr.P.H.
Common Dreams, October 19, 2024

Once you’ve been told you have cancer, waiting is the last thing you want to do. As a practicing Gynecologic Oncologist, I know patients with so-called “Medicare Advantage” plans will be waiting—waiting to find a specialist like me within their network, waiting to get pre-authorization for the tests they need so we can discuss their diagnosis and possible treatments and, ultimately, waiting to get approval for their surgery and treatments.

Unfortunately, Project 2025 would make this already difficult process even worse. By fully privatizing Medicare, this Heritage Foundation plan would shift even more power into the hands of corporate insurers, who prioritize profits over patient care. The result would be even narrower provider networks, more restrictive approvals for tests and treatments, and a system designed to delay or deny care to those who need it most. For patients, that means critical time lost—time that may mean more pain, more symptoms, and a decreased chance of being cured.

Under Project 2025, the burden of navigating these hurdles would fall not just on patients, but on physicians and health care workers who are already stretched thin. Physicians for a National Health Program estimates that doctors and their teams would spend up to 43 million hours annually dealing with prior authorizations alone. This clinically meaningless administrative burden steals time that should be spent caring for patients, wastes resources that we can’t afford to lose, and is a source of burnout and moral distress for healthcare professionals.

I feel helpless to overcome the negative impact that delays in care have on patients’ chances of being cured. But delayed care is often the best-case scenario for seniors in “Advantage” plans, because there is a high potential that the best cancer center in their area is outside of their narrow network and that treatments will be denied.

Research shows seniors with corporate “Advantage” plans have lower access to the high-volume hospitals that most successfully care for uncommon cancers. For example, people with stomach, pancreatic, and liver cancer requiring surgery were shown to have a higher likelihood of dying when compared to seniors with real Medicare.

Despite the overwhelming evidence showing that privatized Medicare does not serve our seniors’ best interests and wastes money, Project 2025 wants to take over all of Medicare by automatically enrolling seniors in corporate insurance plans without their full consent.

This will be catastrophic for people on Medicare, who will face increasing financial burdens and decreased access to care. An estimated 24 million seniors in corporate “Advantage” plans would face limited provider networks that exclude up to 70% of the doctors in their regions. And more than 15 million people would be considered underinsured due to the reduced benefits available under privatized plans. Without the choice of sticking with real Medicare, our seniors would all be threatened by the health impacts of delayed and denied care.

Corporate insurance plans are designed to make profits, not take care of patients, and so they use shady techniques such as upcoding, which boost payment rates by making patients seem sicker than they are. In 2024, so-called “Advantage” plans overcharged the American people by as much as 140 billion dollars—and provided less care with worse health outcomes. If this system of skimming funds were extended to all seniors, the Medicare trust fund would immediately begin deficit spending, leading to insolvency within five years. It would cost $1.5 trillion more than real Medicare over 10 years.

Congress must take a stand to protect American seniors and the Medicare Trust Fund by rejecting Project 2025’s dangerous push to privatize Medicare.

Instead of funneling money into the hands of corporate insurers, we should be cracking down on overcharging and using those savings to strengthen Medicare. For example, a cap on out-of-pocket spending is crucial to ensure seniors receive the financial protection they deserve. We should also invest in much-needed dental, vision, and hearing coverage for everybody on Medicare.

It’s time to give all seniors access to the best care possible and stop wasting our healthcare dollars on corporate profits.

Dr. Diljeet K. Singh is a women’s health advocate, an integrative gynecologic oncologist, and the president-elect of Physicians for a National Health Program.

https://commondreams.org…

Project 2025 Threatens Full Privatization of Medicare—A Death Sentence for Millions

Despite the overwhelming evidence showing that privatized Medicare does not serve our seniors’ best interests and wastes money, Project 2025 wants to take over all of Medicare by automatically enrolling seniors in corporate insurance plans without their full consent.

By Diljeet Singh, M.D., Dr.P.H.
Common Dreams, Oct. 19, 2024

Once you’ve been told you have cancer, waiting is the last thing you want to do. As a practicing Gynecologic Oncologist, I know patients with so-called “Medicare Advantage” plans will be waiting—waiting to find a specialist like me within their network, waiting to get pre-authorization for the tests they need so we can discuss their diagnosis and possible treatments and, ultimately, waiting to get approval for their surgery and treatments.

Unfortunately, Project 2025 would make this already difficult process even worse. By fully privatizing Medicare, this Heritage Foundation plan would shift even more power into the hands of corporate insurers, who prioritize profits over patient care. The result would be even narrower provider networks, more restrictive approvals for tests and treatments, and a system designed to delay or deny care to those who need it most. For patients, that means critical time lost—time that may mean more pain, more symptoms, and a decreased chance of being cured.

Under Project 2025, the burden of navigating these hurdles would fall not just on patients, but on physicians and health care workers who are already stretched thin. Physicians for a National Health Program estimates that doctors and their teams would spend up to 43 million hours annually dealing with prior authorizations alone. This clinically meaningless administrative burden steals time that should be spent caring for patients, wastes resources that we can’t afford to lose, and is a source of burnout and moral distress for healthcare professionals.

I feel helpless to overcome the negative impact that delays in care have on patients’ chances of being cured. But delayed care is often the best-case scenario for seniors in “Advantage” plans, because there is a high potential that the best cancer center in their area is outside of their narrow network and that treatments will be denied.

Research shows seniors with corporate “Advantage” plans have lower access to the high-volume hospitals that most successfully care for uncommon cancers. For example, people with stomach, pancreatic, and liver cancer requiring surgery were shown to have a higher likelihood of dying when compared to seniors with real Medicare.

Despite the overwhelming evidence showing that privatized Medicare does not serve our seniors’ best interests and wastes money, Project 2025 wants to take over all of Medicare by automatically enrolling seniors in corporate insurance plans without their full consent.

This will be catastrophic for people on Medicare, who will face increasing financial burdens and decreased access to care. An estimated 24 million seniors in corporate “Advantage” plans would face limited provider networks that exclude up to 70% of the doctors in their regions. And more than 15 million people would be considered underinsured due to the reduced benefits available under privatized plans. Without the choice of sticking with real Medicare, our seniors would all be threatened by the health impacts of delayed and denied care.

Corporate insurance plans are designed to make profits, not take care of patients, and so they use shady techniques such as upcoding, which boost payment rates by making patients seem sicker than they are. In 2024, so-called “Advantage” plans overcharged the American people by as much as 140 billion dollars—and provided less care with worse health outcomes. If this system of skimming funds were extended to all seniors, the Medicare trust fund would immediately begin deficit spending, leading to insolvency within five years. It would cost $1.5 trillion more than real Medicare over 10 years.

Congress must take a stand to protect American seniors and the Medicare Trust Fund by rejecting Project 2025’s dangerous push to privatize Medicare.

Instead of funneling money into the hands of corporate insurers, we should be cracking down on overcharging and using those savings to strengthen Medicare. For example, a cap on out-of-pocket spending is crucial to ensure seniors receive the financial protection they deserve. We should also invest in much-needed dental, vision, and hearing coverage for everybody on Medicare.

It’s time to give all seniors access to the best care possible and stop wasting our healthcare dollars on corporate profits.

Dr. Diljeet K Singh is a women’s health advocate, an integrative gynecologic oncologist, and the president-elect of Physicians for a National Health Program.

https://commondreams.org…

Harris’ Medicare proposal is sound

By Kenneth Dolkart, M.D.
Valley News (West Lebanon, N.H.), October 18, 2024

Vice President Kamala Harris recently announced important new proposals for vision, hearing and long-term home care benefits via traditional Medicare. Pundits wasted no time in telling us this was “unaffordable.” People are unaware that their tax money is already funding such programs but is landing in private pockets.

In 1965, health insurers didn’t offer coverage to seniors, as they couldn’t determine how to make a profit on older Americans who often incurred hospital costs. The federal government created Medicare, which has since provided affordable medical coverage for seniors at 2% administrative costs. Long-term care was not a part of original Medicare: back then, male life expectancy was 67 years. Subsequent treatment advances and lengthening life expectancy prompted our need for long-term care services.

In considering this, let’s remember how the smartest guys in corporate boardrooms promote profit-directed insurance “innovations” while industry and well-lobbied politicians instill dread of “government expansion” of traditional Medicare.

This era is dominated by the mission of the Heritage Foundation: to promote public policies “based on principles of free enterprise and limited government.” Governmental services formerly considered a “public good” are privatized toward profit or attacked as “communism.”

The Medicare Modernization Act of 2003 and Medicare Part D, is an example of such philosophy. Lobbyists for BigPharma designed Part D as an opaque, stand-alone program using for-profit pharmacy benefit managers (PBMs) to administer medication coverage for Medicare. Seniors are left to scramble for ever-changing drug plans, which use hidden industry rebates and charge Medicare inflated costs, while BigPharma and PBMs reap record profits. (The Inflation Reduction Act of 2022 repeals the prohibition against Medicare negotiating with drugmakers to bring down prices.)

Traditional Medicare provides 100% of hospital costs but only 80% of outpatient services, with the remaining 20% of outpatient care covered by purchasing private supplementary “Medigap” insurance. The 2003 legislation required enrollment in private Part D plans to avoid later penalties, so both Medigap and Part D plans need be selected, and Centers for Medicare and Medicaid (CMS) rebranded Medicare Part C as “Medicare Advantage.” (MA)

Managed care insurers then designed lucrative government contracts to administer Medicare dollars, and integrated with PBMs to market combined Medigap and Part D plans. These MA contracts start with “benchmark” payments based on average costs of traditional Medicare services within a region. If the MA plan bids below the benchmark, it keeps a percentage of the difference, which may lower the premium, add profit or allow added bells and whistles. MA payments are boosted with benchmark “adjustments,” “risk adjustment” rebates when enrollees are supposedly sicker than average, and “quality” bonuses.

Accordingly, Medicare Advantage designed plans to attract and retain healthy people. They discouraged enrollment of sick, costly beneficiaries via drug formularies that limit treatments for expensive disorders and via narrow clinician networks. Although enrollees on MA plans are healthier, the average “risk scores” by which payments are calculated are inappropriately coded 20% higher than traditional Medicare. “Favorable selection” and risk score manipulation gives MA plans 6% more per enrollee than the cost incurred by traditional Medicare, although MA spends up to 25% less on care per enrollee.

MA insurers routinely “upcode” an illness’ severity to pad risk scores. What’s more, studies demonstrate that MA just makes things up. Investigative reporting from the Wall Street Journal found that MA plans fraudulently pocketed $50 billion for entirely invented diseases between 2018 and 2021. As far back as 2014, CMS efforts to claw back fraudulent overpayments were scuttled by “industry pressure.” Alas, CMS is a “captured agency” in which insurance executives shuttle through revolving doors between stints in CMS and the MA insurance plans that handsomely reward them. MA plans have accrued overpayments of $550 billion the past 15 years.

MedPAC, the agency that supervises Medicare, reports that MA plans were overpaid $88 billion in 2023 above what traditional Medicare would have expended for equal care for identical patients. Including fraudulent billing boosts overpayment estimates to as much as $140 billion per year. MA yields gross profit margins far exceeding that from other types of medical insurance, so insurers flocked to MA to reap public dollars. Profits by MA plans skyrocketed on our tax-fueled dollars, with UnitedHealthGroup quadrupling profit from $7.86 billion in 2013 to $32.4 billion in 2023. As Advantage ads fill your screens during open enrollment, realize that CMS allows MA insurers to spend billions of our taxes dollars on deceptive advertising campaigns that intentionally omit some vital facts.

Sure, healthy seniors are happy with low or absent MA insurance premiums. However, once seniors need care, recent studies demonstrate that denials, co-pays and co-insurances for skilled nursing, durable medical goods, chemotherapy, home visits and out-of-network treatment result in higher out-of-pocket costs than traditional Medicare. This is despite so-called MA “caps” on such costs. Care is hindered by denial or delay of Medicare-approved services and restrictions to narrow networks. Seniors with serious illness end up paying more, for less care, and, at that point, are trapped in MA plans due to absence of guaranteed issue of alternative, affordable Medigap plans. For clinicians and medical practices, the millions of wasted hours spent performing needless prior authorizations result in added moral and economic burden.

As to new benefits for Americans, the Congressional Budget Office estimates that it would cost $84 billion to cover dental, hearing and vision benefits to both traditional Medicare and Medicaid. Existing yearly overpayments to MA far exceed that, and can be better allocated to long-term home care and other services in traditional Medicare. Those dollars would actually go to needed medical care.

The stewardship of Medicare must be reclaimed from the financial interests of private equity and insurance conglomerates. Government can resume its essential role in updating and improving how Medicare serves the needs of Americans. CMS must eliminate “favorable selection” practices and redesign the benchmarks, risk adjustments and bonuses that are manipulated by MA plans. Improve and pass the bills in Congress that address denial and delays in care, and close the revolving door at CMS that serves industry rather than citizens. The Federal Trade Commission must be empowered to tackle insurance industry abuses and recoup huge losses from fraudulent billing.

If there is not the will to create efficient, universal health insurance, at least our Congressional leaders can allocate recovered savings to “level the playing field” and expand services in traditional Medicare, while securing the long-term stability of the Medicare Trust Fund.

Dr. Kenneth Dolkart is a geriatrician and an assistant professor at Dartmouth’s Geisel School of Medicine.

https://vnews.com…

The Only Way to Fix U.S. Health Care

The evidence confirms what our patients regard as common sense: copays and deductibles cause people to skip needed care and hence suffer poorer health, and even mortal consequences

By Adam Gaffney, M.D., M.P.H.; David U. Himmelstein, M.D.; and Steffie Woolhandler, M.D., M.P.H.
The New York Review of Books, Nov. 7, 2024

Reviewed: We’ve Got You Covered: Rebooting American Health Care by Liran Einav and Amy Finkelstein

“We take it back,” Liran Einav and Amy Finkelstein, two of America’s most prominent health economists, declare in a new book, We’ve Got You Covered, their blueprint for reforming our health care system. After years of preaching “the gospel” that “patients must pay something for their care,” they’ve now abandoned the message. 

Instead they propose tax-funded “basic” health coverage—without copayments, deductibles, or other forms of “cost-sharing”—for all Americans. Almost simultaneously, three other leading health economists— Katherine Baicker, the provost of the University of Chicago, who served on George W. Bush’s Council of Economic Advisers, and Amitabh Chandra and Mark Shepard of Harvard—outlined a similar proposal in the Journal of Economic Perspectives. This may signal an encouraging shift in elite opinion, at least among economists, in the debate over health care reform. 

Einav and Finkelstein, professors at Stanford and MIT, respectively, spent years teaching that unless patients had skin in the game—that is, unless they had to shell out for each medical appointment—they would “rush to the doctor every time they sneeze,” siphoning resources from other, more beneficial uses. That line of thinking has been dogma among US economists, despite decades of evidence to the contrary in the form of successful single-payer systems in Europe and Canada with little or no such “cost-sharing,” and helps explain why (often hefty) copayments and deductibles have been central to US health insurance. 

Health insurance as we know it was pioneered during the Great Depression, when Baylor University Hospital offered coverage, without copays or deductibles, to financially strapped Dallas schoolteachers. This grew into a nationwide federation of nonprofit Blue Cross plans, which dominated the market for the next several decades and likewise avoided cost-sharing. But in the years after World War II, commercial insurance firms began selling lower-cost plans that incorporated cost-sharing in order to discourage frivolous use of care (and insurers’ money), much as car insurers imposed deductibles to deter policyholders from taking hammers to their windshields when they wanted dirty glass replaced. Economists call this behavior “moral hazard.” 

The budding field of health economics transformed this business contrivance into gospel. In 1968 an influential paper by Mark Pauly argued that when health care is free, people use it in excess. The following decade Harvard’s Martin Feldstein (who later chaired President Reagan’s Council of Economic Advisers) wrote that “American families are in general overinsured against health expenses” and that higher out-of-pocket medical costs “would increase welfare” for society. 

Soon after, a study called the RAND Health Insurance Experiment randomly assigned thousands of families to different insurance plans, some of which imposed cost-sharing and some of which provided free care. In a bombshell 1981 article in The New England Journal of Medicine, the authors reported that people who received free care used more of it. “Moral hazard” became a credo. (Only in 1986 did the RAND team report that cost-sharing curbed both needed and unneeded care in similar measure.)

The consequences were dire. The Heritage Foundation promoted gimmicky “consumer-driven” plans combining sky-high deductibles with tax-advantaged savings accounts that would, they argued, transform patients into prudent consumers. Milton Friedman—the godfather of libertarian economics—pushed the idea to the extreme, recommending that Medicare and Medicaid be abolished and that “every US family unit [be required to] have a major medical insurance policy with a high deductible, say $20,000 a year or 30 percent of the unit’s income.” 

Most workers in the US once enjoyed first-dollar coverage (no copays or deductibles) for much of their care: in 1982, for instance, only 30 percent of private plans had a deductible for hospital stays. Today 90 percent of private sector workers with job-based individual coverage face a deductible that averages $1,735 a year. Some states have even sought waivers to increase out-of-pocket payments for impoverished Medicaid recipients. In 2015 Indiana, under Governor Mike Pence, announced that such payments could “preserve dignity among members receiving public assistance and provide them with ‘skin in the game.’” 

Yet reams of evidence confirmed what our patients (and physician colleagues) regard as common sense: copays and deductibles cause people to skip needed care and hence suffer poorer health, and even mortal consequences. Women with breast cancer whose employers shifted them to high-deductible plans wound up delaying diagnostic workups and chemotherapy. Modest prescription copays caused seniors to forgo lifesaving medications. 

And while copayments and deductibles discouraged care seeking, they didn’t constrain health care spending, which rose from $1,000 per person in 1980—equivalent to spending in other wealthy nations—to $13,493 in 2022, more than double the Organisation for Economic Co-operation and Development average. (And notably the life expectancy in the US, which was middle of the pack among high-income nations in 1980, lagged 5.8 years behind the average by 2021.) 

As “skin in the game” lost its cachet, the big insurers pivoted to other profit-maximizing strategies. For instance, many now focus on privatizing Medicare and Medicaid. Some employ doctors directly and use penalties and bonuses to motivate them to minimize expensive care. Those shifts—along with an ever-growing body of data on medical harms—have perhaps changed the intellectual climate for economists to one more tolerant of jettisoning cost-sharing. 

However, if Einav and Finkelstein (like Baicker, Chandra, and Shepard) have finally gotten some important things right, they continue to miss the mark on others: they embrace a two-tiered medical system and ignore (or, in Baicker and colleagues’ case, advocate policies that would accelerate) the corporate takeover of health care. These are related issues. Treating medical care as a market commodity like microchips or microwaves supports the dual falsehoods that copays benefit society and that market-driven corporatization breeds efficiency and quality.

After World War II many nations created national health insurance (NHI) or national health service (NHS) systems covering their entire populations. The UK’s NHS, for instance, enacted in 1946, provided nearly all care for free. The following year Saskatchewan, under Premier Tommy Douglas (voted the “Greatest Canadian” by CBC viewers in 2004), implemented universal hospital insurance. By 1971 this had been expanded to provide all Canadians with first-dollar coverage for both hospital care and regular doctors’ visits. (Additionally, Canada prohibits private insurers from selling plans that duplicate the public coverage, and doctors and hospitals from accepting most private payments, provisions that keep wealthy and poor Canadians in the same health care boat, bolstering [1] political support for the single-payer system they call Medicare.) 

It once seemed possible that the US would follow suit. As the UK and some Canadian provinces implemented their systems, the Truman administration proposed an American version of NHI. A campaign led by the American Medical Association—which employed a pioneering public relations firm that painted the NHI bill as a “communist” act—defeated Truman’s push, and employer-paid health insurance filled the void. It had spread during the war—when wage increases but not additional “fringe benefits” were banned—and burgeoned after the war when Congress codified, in 1954, favorable tax treatment of employer-paid benefits. 

By 1955 private plans covered 65 percent of Americans. Among the millions left out were the unemployed, the elderly, those in agricultural or domestic work, and those working for small employers that didn’t offer health [2] benefits. The civil rights–era enactment of Medicare and Medicaid trimmed the share of Americans without coverage from about 24 percent in 1963 to 11 percent by the late 1970s. 

But as the power of unions waned under President Reagan, private coverage shrank, and the number of uninsured Americans rose. By 1994 15.8 percent of Americans had no health coverage. The passage in 2010 of the Affordable Care Act (ACA), which expanded Medicaid and offered new subsidies for private insurance, reversed the trend. Emergency pandemic-era measures—mainly liberalized Medicaid eligibility rules—cut the uninsurance rate to an all-time low of 7.4 percent in 2023. Even so, that meant 25 million Americans remained uninsured, a number that the Congressional Budget Office predicts will grow to 28.2 million next year.

These stark figures still understate the precariousness of Americans’ health coverage. Einav and Finkelstein’s research has found that over a two-year period (prepandemic) more than one in five Americans spent at least one month uninsured. The briefest coverage lapses can cause financial ruin and interrupt lifesaving treatment. 

Under our patchwork public-private system, people lose coverage for many reasons. Some fail to file paperwork required to continue their Medicaid eligibility. Others fall off their parents’ coverage when they turn twenty-six. Or they lose a job or are unable to afford the premiums required by most private plans, including ACA plans. Many immigrants are barred from Medicaid and Medicare. 

Yet for five decades most US health economists have advised merely caulking the gaps. Obamacare, which was largely designed by MIT’s Jonathan Gruber, is a prime example. The complex bureaucracy it erected to avoid displacing private insurers added an estimated quarter-trillion dollars between 2014 and 2022 to Americans’ already exorbitant outlays for health insurance administration. 

Einav and Finkelstein now rightly conclude that more patches won’t work; we have to start from scratch. “Basic coverage,” they write, “must be provided automatically, and financed by the taxpayer.” But their support for tax-funded universal coverage comes with a caveat: to be affordable, the public coverage “should be very basic”—worse than current coverage—with “longer wait times, less patient choice.” It should leave “patients and their physicians not at liberty to get any medical care they both want, as they are currently under Medicare.” 

But the very concept of “basic coverage” rests on economic and medical fallacies; there is no workable definition of the “basic” or “minimalist” care Einav and Finkelstein propose that would simultaneously slash spending and provide medically adequate care. There is useless care, to be clear, like ineffective drugs or unneeded surgeries. But ineffective treatments (such as the “energy boost” infusions our local urgent care center advertises) shouldn’t be approved by regulators or prescribed by physicians, regardless of costs. 

In the realm of effective care, there is no circumscribable “basic” category that can be safely carved out of coverage. For patients with serious symptoms, long waits to see a specialist are often harmful. For those with uncommon cancers requiring complex surgeries, access to a top-level cancer center where such surgeries are routinely performed can be lifesaving. “Basic coverage” might also exclude expensive treatments deemed cost-ineffective, but many such treatments—like organ transplants or gene therapies for sickle cell disease—are also lifesaving. “Minimalist coverage,” in practice, means greater disability and shorter lives. 

Recognizing that the affluent wouldn’t abide “basic coverage,” Einav and Finkelstein (like Baicker et al.) would allow “top-up,” or supplemental, coverage in a higher tier. Of course, imposing long lines on working- and middle-class Americans while letting the rich jump the queue isn’t just inequitable; it’s medically hazardous. In the real world of finite health resources—with a limited number of physicians, nurses, PET scanners, and ICU beds—privileging the rich inevitably siphons resources away from everyone else.

But a simpler, more efficient, healthier, and fairer alternative has long been available: universal single-tier coverage. Representative Pramila Jayapal and Senator Bernie Sanders have introduced Medicare for All bills delineating [3] that approach. Critics contend that this would be too expensive, drawing on moral hazard theory and the RAND experiment to argue that eliminating cost barriers would cause patients to overuse their health benefits. Yet the RAND experiment only assessed copayments’ effects on individual patients’ use of care, not society-wide effects, which may differ. In health care, supply often drives (or constrains) a society’s overall use of care. Doctors can fill openings in their schedule by advising more frequent return visits; conversely, they may avoid transferring borderline patients to the ICU when beds are tight. Milton Roemer described this phenomenon with the aphorism “A hospital bed built is a hospital bed filled.” Given limited supplies of doctors and hospital beds, cost-sharing that reduces one group’s use of services would likely increase it for those without cost barriers, redistributing care like toothpaste in a closed tube squeezed on one end. 

That’s not just a theory. John Wennberg’s pathbreaking analyses of regional variation in care linked the frequency of hospitalizations and operations to the local supply of beds and surgeons. Yet patients’ outcomes in high- and low-use regions were similar, suggesting that some hospitalizations and surgeries were unnecessary. We’ve found that the implementation of both Medicare and Obamacare increased physician visits for the newly covered, but those increases were fully offset by virtually imperceptible decreases for others. A similar phenomenon occurred in other nations when they expanded coverage. For instance, when Quebec implemented its universal health care program in 1970, a study in The New England Journal of Medicine reported that “physician visits per person per year remained constant at about five but were markedly shifted from persons in higher to lower income groups.” 

The economy of health care is singular. Care is constrained by a finite “supply,” while “demand” for care is unlike demand for most goods; patients want better health, not more colonoscopies or more trips to the operating room. And the types of care that improve health are determined not by consumers’ preferences but by their health needs—that is to say, by discoverable and objective medical facts. Scientific practice and supply planning can more safely and effectively constrain overuse than copays and two-tiered medicine. 

There is bad behavior, to be sure, but it’s not the behavior of patients with excessive demand; it’s corporate providers that raise costs and subvert care to benefit their bottom lines—a blind spot, as noted, in Einav and Finkelstein’s vision. They address one side of the policy coin—the question of who pays for health care—but neglect the equally important question of who owns it. Any workable prescription for reform must reckon with both. 

Profit seeking in medicine is not new. Pliny the Elder complained of physicians’ “avarice, their greedy bargains made with those whose fate lies in the balances.” In modern times commercial firms have dominated drug manufacture, and in the early twentieth century small proprietary nursing homes and hospitals were commonplace. But the contemporary takeover of health care provision and financing by mammoth investor owned firms—what the late Arnold Relman, the New England Journal of Medicine editor-in-chief, described as the “medical-industrial complex” in [4] an influential 1980 editorial—is unprecedented.

Beginning in the 1980s investor-owned hospital chains rapidly expanded; between 1980 and 2020 the share of US community hospitals that were for profit doubled, reaching 24 percent. Meanwhile, among nonprofit hospitals, the advantage conferred by size in negotiating prices with insurers, and hospitals’ increasing reliance on borrowing (which must be paid back from operating profits) to finance construction and other capital needs, prompted both consolidation and the ascendancy of a corporate managerial ethos. The resulting sprawling nonprofit hospital systems that dominate entire regions of the country often behave like profit-maximizing entities; between 2018 and 2023 Providence (a Catholic system with fifty-one hospitals and one thousand clinics) used unlawful collection practices to dun 99,446 patients in Washington state alone.

While most hospitals remain at least nominally nonprofit, investor ownership nearly predominates in most other health care sectors. Between 1987 and 2022 for-profit ownership of substance use treatment facilities rose from 14 to 42 percent. About one third of dialysis centers were for profit in 1980; now 89 percent are, with two firms (both noted for poor care and excess death rates) owning 80 percent of all centers. Even hospice care has evolved into an aggressive corporate-dominated industry, with 75 percent for-profit ownership in 2022.

Horizontal consolidation—one firm acquiring myriad hospitals or dialysis centers—started decades ago. Now vertical integration—one firm owning, say, insurance plans as well as medical providers—is remaking the medical landscape. Increasingly, your doctor is employed by your insurer and risks unemployment if they fight insurers’ restrictions on your care. 

UnitedHealth, the nation’s largest health insurer, also employs or is “affiliated” with 90,000 physicians—nearly 10 percent of all US doctors. Its pharmacy division oversees, negotiates prices for, and dispenses 1.4 billion mail-order prescriptions annually, and its billing and data-mining subsidiary handles nearly one in three Americans’ medical records annually. CVS Health (ranked sixth on the Fortune 500) has similarly expanded beyond its familiar brick-and-mortar stores. It bought the insurance giant Aetna in 2019; owns the nation’s largest mail-order pharmacy (serving 103 million Americans) and an urgent care chain with 1,100 locations; acquired a home health care firm with 10,000 clinicians in 2023; and also bought Oak Street Health, a group of medical practices in twenty-five states. Meanwhile Amazon is building out its One Medical chain of upscale clinics and telehealth services that prescribe drugs for seamless purchase from Amazon’s online pharmacy. 

Even more perniciously, private equity firms are invading health care, [5] investing $151 billion in the industry in 2021 alone. From 2003 to 2017 those firms—which prioritize short-term profit, often by asset stripping and then dumping their hollowed-out acquisitions—bought 282 hospitals. Private equity now controls more than four hundred hospices, nearly 10 percent of gastroenterologists, 8 percent of dermatologists, and more than 10 percent of oncologists. 

Private equity firms have similarly cannibalized hospitals, worsening the quality of care and increasing costs. Cerberus Capital, after buying a string of hospitals from Boston’s archdiocese, paid off investors by selling the land and buildings, leaving the hospitals rent-burdened, unable to pay for essential equipment, and spiraling into bankruptcy. Some of the chain’s hospitals closed, and only enormous government bailouts are keeping others afloat. Nationwide, private equity acquisition causes a 24 percent fall in hospitals’ assets and a 25 percent rise in patients’ hospital-acquired complications, such as infections and falls.

Nursing homes have faced a similar fate. When the Carlyle Group purchased the ManorCare nursing home chain, it sold off the nursing homes’ real estate, distributed the proceeds to investors, and saddled the nursing homes with exorbitant rent payments that forced staffing cuts— leaving its patients to suffer from bedsores, falls, and other complications, as flagged by inspectors. After nursing homes are acquired by private equity, a study found, their residents’ death rates increased 11 percent and billings rose 8 percent. 

And when private equity firms buy doctors’ practices, they raise prices and patients’ costs. One private equity–owned firm, TeamHealth, employs 16,000 clinicians. It and another private equity–owned ER-staffing firm (Envision Healthcare) were responsible for a large portion of an epidemic of surprise ER bills: they dictated that their doctors exit all insurance networks, even those accepted by the hospitals where they worked, enabling the firms to bill patients at exorbitant rates. 

Paradoxically, taxpayers have underwritten the corporate takeover of care. Government expenditures (including not just Medicare and Medicaid but tax subsidies for private insurance purchases and payments for government employees’ health benefits) currently account for 69 percent of the $5 trillion spent annually on health care in the US. Private health insurers now derive most of their revenues and up to 90 percent of their profits from Medicare and Medicaid. 

Under the Medicare Advantage (MA) program, Medicare pays private insurers to cover seniors who choose an MA plan, lured by the promise of extra benefits not available in traditional Medicare. Today more than half of seniors are covered by such private plans, with UnitedHealth capturing nearly one third of the market. Insurers have profited by exaggerating how sick their enrollees are, garnering higher Medicare payments, and by shedding expensively ill enrollees. MedPAC, Congress’s nonpartisan Medicare advisory panel, estimates that because of such gaming Medicare paid MA firms $78 billion more last year than it would have paid for their enrollees if they had been covered by traditional Medicare. Insurers use a fraction of that overpayment to entice enrollees with extra benefits like eyeglasses and fitness club memberships, but 97 percent of it is eaten up by profits and overhead, which amounted to $2,257 per MA enrollee in 2020. (Traditional Medicare’s overhead was $245 per enrollee that year.) Meanwhile MA insurers often deny payment for needed care. UnitedHealth, for instance, allegedly used an AI algorithm to automatically deny coverage for nursing home stays, although the Biden administration has emphasized that care denials cannot be based on AI algorithms alone. 

Einav and Finkelstein leave the door open for MA-type plans to serve as the chassis for their universal coverage system (they describe basic coverage “offered by private firms” as one potential reform structure), while Baicker et al. explicitly cite MA as a model for the reform they have in mind. Both reject comprehensive, fully public coverage. (According to Einav and Finkelstein, Medicare for All can’t accommodate patients’ varying “tastes for medical care.”) Unfortunately the reforms these economists advocate couldn’t realize the vast savings on bureaucracy—about $900 billion annually—that single-payer could, savings needed to expand and improve coverage for everyone. 

In 1948, on the eve of the NHS’s launch, a pamphlet sent to each residence in England and Wales captured the egalitarian spirit of that new program: “Your new National Health Service begins on 5th July….Everyone—rich or poor, man, woman, or child—can use it or any part of it…. There are no charges, except for a few special items.” 

Looking back some six decades later, the British GP and epidemiologist Julian Tudor Hart observed how the service seemed to defy the laws of economics. “Economists told us then that, at zero price, demand would be infinite,” Hart wrote in The Political Economy of Health Care. “The new NHS economy was utopian, against human nature and bound to fail.” Rather than fail, Hart continued, the NHS became a “huge popular success.” 

Yet today it faces a multifaceted crisis, with outdated and understaffed facilities, underpaid doctors and nurses, growing waits for essential care, and widening health inequalities. These problems stem, however, not from out-of-control costs driven by moral hazard but from government-imposed austerity. Britain’s health spending, and particularly its investments in facilities, has for decades trailed that of almost all other wealthy nations: this was the central finding of an independent review commissioned by the new Labour government. That austerity, in turn, was enabled by the “top up coverage” strategy economists recommend. 

The NHS, created by Clement Attlee’s post–World War II Labour government, didn’t just provide tax-funded universal and comprehensive coverage. It also nationalized most hospitals and directly employed specialists. Those decisions, championed by Minister of Health Aneurin Bevan, a socialist and former coal miner, uncoupled health care from commerce. “There is no reason why the whole of the doctor-patient relationship,” Bevan wrote in his 1948 “Message to the Medical Profession” in the British Medical Journal, “should not be freed from what most of us feel should be irrelevant to it, the money factor.” 

Still, from the beginning the NHS also allowed the wealthy to buy care and insurance in a parallel private system very much connected to commerce and, as the historian E.P. Thompson opined in 1987 in the London Review of Books, based on “cons and parasites on the technologies and resources of the NHS.” In ravaged postwar Britain, this seemed a trivial concession to the few Britons able to afford it; in 1955 only 1 percent of the UK population had private health insurance. But growing investments (and elite Harley Street doctors) subsequently expanded private sector options. When Margaret Thatcher assumed office in 1979, 5 percent of the nation— including Thatcher herself, who extolled the virtues of “going private”— purchased their own coverage. By the time she left office that share had more than doubled.

In Our NHS: A History of Britain’s Best-Loved Institution, the historian Andrew Seaton traces Thatcher’s and her allies’ hope for full-scale privatization of the NHS, or at least the imposition of charges on patients. But Thatcher, facing popular resistance to such changes, settled for a move toward market-based incentives—a strategy devised by Alain Enthoven, a Stanford economist who headed systems analysis at the Pentagon during the Vietnam War—that starved the public system of funding.

That stealth privatization approach was appealing to wealthy Britons, for whom private coverage was almost certainly cheaper than the taxes they’d bear to adequately fund the NHS. It is also, of course, the preferred strategy of Republicans in the US who seek to undermine public services. Only widespread popular affection for the NHS—epitomized by the tribute to the NHS performed at the opening ceremony of the 2012 London Olympics—has forestalled further damage.

The NHS experiment underscores two lessons most economists haven’t learned. A rationally planned, publicly financed and owned health care system can provide free and comprehensive care without causing runaway costs. But diluting the system with top-up coverage and market incentives undermines its political, economic, and medical foundations. 

Another system of health care—without medical debt, insurance hassles, red tape, corporate predation, copays, punishing deductibles, and paltry care—is possible, not to mention that support for it is hugely popular. Achieving such a system will require a new economics of care, one that moves past outdated economic orthodoxies, divorces medicine from commerce, and provides care on the basis of needs, not means. 

References

  1. For more on the Canadian system, see Nathan Whitlock, “Where Health Care Is a Human Right,” The New York Review, November 19, 2020.
  2. Dixiecrats insisted on separate programs for the mostly white elderly and the disproportionately Black poor: Medicare, a generous program modeled on Blue Cross coverage, and Medicaid, a welfare-based program whose implementation was ceded to often-racist state governments who were free to restrict and underfund care.
  3. We’ve occasionally advised Sanders; Woolhandler and Himmelstein helped draft his initial single-payer bill, as well as Paul Wellstone’s early Senate version, and Gaffney testified on behalf of Sanders’s bill (and on Sanders’s invitation) before the Senate Budget Committee in 2022.
  4. Barbara and John Ehrenreich, and others in the left-wing group Health-PAC, used that term earlier, but Relman told two of us (Himmelstein and Woolhandler) he was unaware.
  5. See Kim Phillips-Fein, “Conspicuous Destruction,” The New York Review, October 19, 2023.

https://nybooks.com…

Medicare for All Explained Podcast: Episode 116

The Curse of Medical Debt

October 15, 2024

Podcast host Joe Sparks discusses a KFF Health News report that finds 100 million Americans—far more than previously reported—are burdened with medical debt.

“We can end future medical debt,” he says, “with a single-payer Medicare for All health care system that eliminates out-of-pocket expenses.”

Additional episodes will be uploaded monthly. Subscribe in iTunes, or access a complete archive of the podcast, below.

https://medicareforallexplained.podbean.com

ACA Open Enrollment = Confusion + Scams

It’s ACA enrollment season again! Another opportunity to contemplate / navigate complex insurance plan changes and choices, and try to avoid come-ons for non-ACA products that provide minimal coverage — scams. Ah, if we just had universal coverage with identical comprehensive benefits, durable from year to year, indeed lifelong. Single payer.

What’s New and What To Watch For in the Upcoming ACA Open Enrollment Period, KFF Health News, October 8, 2024, by Julie Appleby

It’s that time of the year again: In most states, the Affordable Care Act’s annual open enrollment season for health plans begins.

Current enrollees who do not update their information or select an alternative will be automatically reenrolled into their current plan or, if that plan is no longer available, into a plan with similar coverage.

While some health plans offer small-dollar gift cards or other incentives to encourage participation in wellness efforts, they would not offer cash cards worth thousands of dollars a month to help with groceries, gas, or rent. Even so, social media and online sites are rife with such promises. Such ads are among the avenues allegedly used by unscrupulous brokers who enroll or switch plans without the express permission of consumers. Also, be cautious about the websites you use to search for coverage. Type “Obamacare” or “cheap health insurance” into a search engine and often what pops up first are sponsored private sector websites unaffiliated with the official state or federal government marketplaces for ACA coverage. While they may try to look official, they are not.

Another concern: Regulators are seeing an increase in complaints from consumers about offers of health coverage requiring consumers to join a limited liability corporation. These are often non-ACA products, amounting to a hodgepodge of discount cards, for example, or limited-indemnity plans. Some of these self-funded plans only cover preventive services such as a yearly check-up or annual health screening.

Short-term plans, which are technically not ACA coverage and not subject to its benefit rules and preexisting benefit protections, can be issued for only four months of coverage. Consumers who relied on the longer periods need to check their plans’ details and consider enrolling in an ACA plan instead to avoid a situation in which their short-term plan expires early or midyear, potentially leaving them unable to get coverage elsewhere for the remainder of the year.

Sorting through the dozens of options on the marketplace is challenging, so most people do seek assistance. Another consideration when choosing a plan is to check whether its network includes the doctors and hospitals you typically see, as well as whether its formulary covers your prescription medications, and how much it charges for them.

One piece of advice remains constant: Whether you are enrolling for the first time or have an existing plan, it’s always worth it to shop around.

Comment:

By Don McCanne, M.D.

Just a reminder: Of the high income nations appearing in the Commonwealth Fund report, the United States has the most expensive but poorest performing health care system of all.

What is ironic is that each year we are forced to reevaluate our existing health plans since the insurers frequently change the benefits or functioning of the plans, with changes usually accruing to the benefit of the insurers, and, at that, we may lose the option of keeping the plan we have. So, not only do we have the lousiest system, we may lose the option of keeping the benefits we do have, even if mediocre, or perhaps not even being able to select options that would be more appropriate for any change that could occur in our health status.

Being granted mostly poor choices amongst a dysfunctional system is certainly a contributor to the high expense and poor quality of our health care system. But we could have a much better choice, and that would be to elect government stewards who would enact and implement a vastly superior health care system that would greatly improve the value of our health care spending by funding it with progressive taxes, based on ability to pay, making it affordable for all with no negative impact on the lifestyles of the wealthy. All essential health care services would be accessible to everyone. Of course, that system would be a carefully redesigned, single payer, Medicare for All.

So it’s time to choose, but not from an overpriced, dysfunctional health care system, but rather from political candidates who understand the health policies that would bring us high quality care for everyone that is affordable for all.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Project 2025 would make health care worse

By Jack Bernard
Georgia Recorder, Oct. 10, 2024

“Cultural institutions like…public health agencies are only as ‘independent’ from public accountability as elected officials and voters permit.”  – Project 2025

Constructed by the Heritage Foundation conservative thinktank, Project 2025 is a radical plan put forth as the basis for an incoming Trump administration. Former President Donald Trump saying, “I know nothing about Project 2025” is disingenuous. Authors include 140 former officials of Trump’s first administration.

It covers many areas, including health care. As someone with decades of health policy experience, implementation of Project 2025 would be a disaster for Georgia, which has the nation’s worst health care. Classifying public health departments as “cultural” …. versus scientifically based institutions… opens them up to raw politics. Politicization and ideological federal funding reductions would cripple already inadequately funded functions such as mental, physical and environmental health.

The problem isn’t just Trump. Gov. Brian Kemp emphasizes Georgia’s positives, but continually ignores negatives, like health care access.

Georgia has the nation’s third largest number of uninsured. Kemp enacted Georgia’s Affordable Care Act Medicaid “waiver.” Pathways. Pathways costs Georgia a lot, while producing little. Kemp said it would cover 100,000-200,000 Georgians. But only 4,300 have enrolled so far.

More than 400,000 uninsured would get coverage if we had normal Medicaid expansion. Further, 90% of the cost would be paid for by the federal government. Under Pathways, the feds pay two-thirds.

Georgia’s maternal and infant mortality rates are disastrous. Under Kemp, the situation has deteriorated. The death rate increased nearly a third between 2018 and 2021.

Conservatives believe Georgia’s six-week abortion rule is too liberal – and advocate banning abortions, no exceptions. Project 2025 indicates Trump  “should…enact the most robust protections for the unborn that Congress will support while deploying existing federal powers to protect innocent life.” Further, Project 2025 says the “FDA should…reverse its approval of chemical abortion drugs.” This document also promotes restricting abortion access for veterans.

A Fulton County judge recently ruled Georgia’s six-week abortion ban unconstitutional (a decision subsequently overturned by the Georgia Supreme Court). Kemp’s spokesperson responded, saying: “Once again, the will of Georgians and their representatives has been overruled by the personal beliefs of one judge”

This statement is hypocrisy at its worst. There was no statewide referendum on abortion. The General Assembly refused to allow a vote on it.

“The deficit is a Medicare and Medicaid problem.” Traditional Medicare would be gutted, making private Medicare Advantage PPOs and HMOs the “the default enrollment option.” Private insurance has 12% administrative and marketing overhead versus 2% for traditional Medicare.

Removing regulatory agency “burdensome policies,” such as regulations protecting patients, opens Medicare Advantage programs to increased financial mismanagement. Questionable Medicare Advantage plan diagnoses already cost taxpayers $50 billion.

During the debate between Trump and Vice President Kamala Harris, he stated that he has the “concepts of a plan” to replace the ACA, often called Obamacare. He’s probably referring to Project 2025.

Millions would lose ACA health insurance. Trump proposed state block grants in his 2020 “A BUDGET FOR A Better America.” Millions would lose insurance in states where coverage is a lower priority.

Nationally, under Project 2025 Medicaid expansion would be limited by adding “work requirements.” Known as the Pathways waiver in Georgia, this approach has failed.

Georgia projected 100,000-200,000 new people would be covered via Pathways.

However, only 4,500 received coverage and administrative costs are high. If current national Medicaid expansion reverts to Georgia’s ineffective model, tens of millions will lose coverage.

Project 2025 undercuts public health and pollution control regulations. It ignores science, stating, “incentives here are no different from those of global elites insulating policy decisions—over the climate, trade, public health.” Instead, it encourages vague, questionable free-market healthcare “solutions.”

It states there should be no government “pricing control” and “alternative insurance coverage options.” Project 2025 would eliminate drug price reductions for Georgia’s Medicare beneficiaries, ending “taxes on drug manufacturers to compel them to comply with Medicare price controls.”

In conclusion, neither Kemp or Trump have a reasonable plan to improve the health of Georgians or Americans. Both are alike in that for political gain, they want to run against Democrats and Washington.

Kemp should be alleviating Georgia’s shortcomings versus crowing about being No. 1 for business. Partly due to Kemp’s policies, Georgia’s health care is failing. And Project 2025 will just make it worse.

Jack Bernard, formerly Director of Health Planning for Georgia and a corporate SVP, is currently Chairman of the Board of Health in Fayette County and on the Executive Board of the Georgia Public Health Association. He is also on the steering committee for the Georgia Chapter of Physicians for a National Healthcare Program.

https://georgiarecorder.com…

Medicare Advantage Plans Protect High Profit Scams

Medicare Advantage is a cash cow for insurers, and they know how to milk the system: boost profits via overcharge schemes, block government regulation, and when push comes to shove, abandon costly insurance markets.

Health Insurer Financial Performance in 2023, KFF, July 2, 2024, by Jared Ortaliza, et al.

At the end of 2023, gross margins per enrollee ranged from $753 in the Medicaid managed care market to $1,982 in the Medicare Advantage market. Gross margins [amount by which premiums exceed claims costs] per enrollee in the group and individual markets were $910 and $1,048, respectively, roughly half the level observed among Medicare Advantage plans on average.

The Medicare Advantage Influence Machine, KFF News, September 30, 2024, by Fred Schulte and Holly K. Hacker

Federal officials resolved more than a decade ago to crack down on whopping government overpayments to private Medicare Advantage health insurance plans, which were siphoning off billions of tax dollars every year.

But Centers for Medicare & Medicaid Services officials have yet to demand any refunds — and over the years the private insurance plans have morphed into a politically potent juggernaut that has signed up more than 33 million seniors and is aggressively lobbying to stave off cuts.

Critics have watched with alarm as the industry has managed to deflate or deflect financial penalties and steadily gain clout in Washington through political contributions; television advertising, including a 2023 Super Bowl feature; and other activities, including mobilizing seniors. …

David Lipschutz, an attorney with the Center for Medicare Advocacy, a nonprofit public interest law firm, said policymakers have an unsettling history of yielding to industry pressure. “The health plans throw a temper tantrum and then CMS will back off,” he said. …

CMS, the Baltimore-based agency that oversees Medicare, has long felt the sting of industry pressure to slow or otherwise stymie audits and other steps to reduce and recover overpayments. These issues often attract little public notice, even though they can put billions of tax dollars at risk.

In August, KFF Health News reported how CMS officials backed off a 2014 plan to discourage the health plans from overcharging amid an industry “uproar.” The rule would have required that insurers, when combing patients’ medical records to identify underpayments, also look for overcharges. Health plans have been paid billions of dollars through the data mining, known as “chart reviews,” according to the government.

CMS efforts to tighten oversight stalled amid years of technical protests from the industry — such as arguing that audits to uncover overpayments were flawed and unfair.

Revolving Door

At least a dozen witnesses in the UnitedHealth case and a similar DOJ civil fraud case pending against Anthem are former ranking CMS officials who departed for jobs tied to the Medicare Advantage industry.

Marilyn Tavenner is one. She led the agency in 2014 when it backed off the overpayment regulation. She left in 2015 to head industry trade group AHIP, where she made more than $4.5 million during three years at the helm, according to Internal Revenue Service filings.

And in October 2015, as CMS department chiefs were batting around ideas to crack down on billing abuses, including reinstating the 2014 regulation on data mining, the agency was led by Andy Slavitt, a former executive vice president of the Optum division of UnitedHealth Group. …

CMS came up with an audit program that selected 30 plans annually, taking a sample of 201 patients from each. Medical coders checked to make sure patient files properly documented health conditions for which the plans had billed.

In a May 2016 private briefing, CMS indicated that the health plans owed from $98 million to $163 million for 2011 depending on how the overpayment estimate was extrapolated, court records show.

But CMS still hasn’t collected any money. In a surprise action in late January 2023, CMS announced that it would settle for a fraction of the estimated overpayments and not impose major financial penalties until 2018 audits, which have yet to get underway. Exactly how much plans will end up paying back is unclear.

Insurers cut Medicare Advantage plans for 2025, Business Insurance, October 4, 2024

Major insurers, including Aetna and Humana, are cutting back on Medicare Advantage plans for 2025, potentially affecting policyholder costs and care arrangements for seniors, Axios reports. This reduction follows policy changes by the Biden administration, leading insurers to adjust offerings and exit some markets. While average premiums are set to decrease slightly, the number of available plans per county has dropped.

Comment:

By Jim Kahn, M.D., M.P.H.

Medicare Advantage is highly profitable, with gross margins of $2000 per patient, 2-3 times higher than other health insurance sectors. Year after year.

The profitability derives from overcharging, via inflated diagnostic coding and risk selection, among other tactics. The overcharge exceeds $100 billion per year.

Further, these numbers understate real profits, because insurers overpay their proliferating affiliated companies (such as PBMs) in a ballooning corporate structure. It’s a shell game, designed to keep within “medical loss ratio” limits. The process is well described by HEALTH CARE un-Covered.

The regulators – CMS (Center for Medicare and Medicaid Services) – understand these problems. But heavy lobbying and a revolving door between CMS and insurers suppresses regulatory action. In the example above, in 2023 a penalty for overcharges prior to 2011 was sharply reduced, because the plans insisted that the findings couldn’t be extrapolated to all beneficiaries. The next step was postponed pending completion of audits from 2018, 5 years earlier! Why so slow? I suspect insurer foot-dragging. The insurers will fight those findings too.

When CMS does manage to scale back overpayment, as they’ve done to small degree in setting premium growth rates for 2025, the insurer response is to assure investors that they can cut costs, and to exit expensive (money-losing) markets (above and here). Who suffers? Sicker than average Medicare enrollees, and traditional Medicare.

Paying for health care shouldn’t be about private insurer profits, overcharges, lobbying, and market maneuvering. It should be about efficiently meeting the health care needs of the population.

https://healthjusticemonitor.org…

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A ‘giant shell game?’ The egregious gimmicks of corporate health care

By Brenda Gazzar
Code Wack Podcast, Oct. 7, 2024

Rebate aggregators? Group purchasing? Vertical integration? How exactly do Pharmacy Benefit Managers, or PBMs, operate to maximize profit? And how are everyday Americans suffering from these practices?

To find out, we spoke to Dr. Ed Weisbart, national board secretary of Physicians for a National Health Program, a single-payer advocacy coalition that boasts more than 25,000 members,  and former chief medical officer for one of the largest PBMs in the country. This is the second episode in a two-part series.

Check out the Transcript and Show Notes for more!

https://heal-ca.org…