By Priya Pal, M.D., Ph.D.
Missouri Independent, July 30, 2024
It may seem like it’s always been a part of America, but Tuesday is Medicare’s 59th birthday. We should pause, celebrate its success and commit to stopping the corporations who are pilfering it for their own profits.
Health care in the United States remains unaffordable and inaccessible despite costing Americans $4.7 trillion a year. Â Medical costs are the leading cause of personal bankruptcy for Americans, and the problem is even more dire among seniors.
Those older than age 55 represent 31% of our country but account for 55% of health care spending. When Medicare was signed into law 59 years ago in Independence, it offered the hope that our population’s elderly and disabled could access health care and age with dignity. It’s lived up to that promise for generations now.
The attack on Medicare began in the 1970s with a proposal to turn the nation’s best public health program over to profit-centric corporations and privatize Medicare. The false premise was that the free market would create competition that could drive down health care costs and turn a profit for the investment community.
That strategy works in many parts of the economy, but not in health care.
Health care by nature cannot be a free market good. It isn’t like purchasing a cell phone where you can identify prices, compare specs of different models, read reviews and ultimately choose to walk away if you don’t like the options. Patients don’t wake up in the morning and choose to take medications because they want to, but because they need to.
Health care emergencies like heart attacks and strokes don’t afford patients or their families the luxury to price shop, compare facilities or reviews. Health care can only turn a profit at the expense of quality care. This is exactly what so-called Medicare Advantage (“MA”) plans have demonstrated every year since their creation in 2003.
MA corporations restrict access to care through small networks, ghost networks, limited out of network coverage, and referral requirements for specialty care — none of which exist in Traditional Medicare.
MA plans typically refuse access to more than half of the physicians in a community, sometimes excluding up to 70% of providers, and cover only half of hospitals in a county. Because these plans force patients with many types of cancer to delay their care and block them from going to “Centers of Excellence”, these critically ill patients are more likely to die after their cancer surgery than similar patients in traditional Medicare.
No one warns patients about these barriers to care, and in fact MA plans grossly mislead people about what they cover. MA network directories frequently include providers who are retired, deceased or simply don’t exist. These limitations are even worse for those living in rural areas where access is already limited.
Even when patients go to in-network providers, they are then faced with prior authorizations and claims denials that further delay access to care.
In 2018 the Office of Inspector General (OIG) published a report showing 75% of appealed claims denied by MA plans were overturned on first repeal. Analysis by KFF found that in 2021, 82% of appealed denials were approved. These high successful repeal rates suggest that many of the denials should have never happened in the first place.
Unfortunately, the appeals system for claims denials is so convoluted that only 1-6% of claims are ever attempted to be appealed, allowing companies to reap massive profits just by denying care. These coverage restrictions have also extended to physician administered medications; in reviewing the 20 most commonly prescribed medications between 12-17 of 20 had access restricted with prior authorizations in 2018.
By 2020, CVS/Aetna and Humana only retained four of the 20 most commonly used physician administered medications on their formularies, Kaiser covered 6 and United Healthcare covered only 2.
One of the shiny selling points for an MA plan over traditional Medicare plans is the inclusion of vision, hearing and dental benefits that aren’t part of traditional Medicare, but on closer look most of these plans have dollar limits that result in thousands of dollars in out-of-pocket costs, making it hard to see much true benefit.
With all the harms noted for MA plans over traditional Medicare plans, one might expect that if the plan were truly bad in a free market, patients would switch away from MA plans. Unfortunately, consumers don’t get a choice, since health care is not a true free-market commodity.
Those with higher health care needs do in fact switch out of MA plans at significant rates, but this option isn’t accessible to everyone. Protections against pre-existing conditions in pricing of Medigap policies only exist for the first 6-12 months in most states, including Missouri. Switching out of MA plans after the first year can be cost prohibitive, trapping patients in a vicious cycle of care delays and denials.
The experiment of privatization of Medicare is a failed one. In addition to the actual patient harms that have come from privatized Medicare, MA plans are inefficient, have high administrative burden and more costly to taxpayers. The government pays more per person in MA plans than in TM plans, at a conservative estimate of 140 billion dollars a year in excess payments.
If that money instead went towards improving traditional Medicare, we could eliminate the need for people in traditional Medicare to purchase Medigap (a $5,000 out-of-pocket maximum would cost $39 billion); we could include hearing, dental, vision for everyone in Medicare and Medicaid ($84 billion), or free people from having to pay a premium for Medicare Part B ($131 billion).
For its 59th birthday this year, let’s protect Medicare from the corporate raiders, call for an end to the subsidies and make the best thing (Medicare) even better.