Are Medicare HMO Costs Excessive?

The Sacramento Bee April 23, 2001 by Greg Gordon

"Government and private studies dating to the early 1980s have found that, because HMOs draw healthier Medicare patients, taxpayers have paid those plans excessively for standard benefits."

"The General Accounting Office found an even bigger overpayment in a study of 800,000 Medicare recipients shortly before they enrolled in 210 HMOs. Congress' investigative arm reported last summer that HMOs had enrolled seniors who were 13.2 percent healthier and were overpaid by $3.2 billion."

Bruce Vladeck, former head of the Health Care Financing Administration:

"This is an area in which the beliefs of many politicians are just contrary to the data. Historically, the public sector in health insurance in the United States has significantly outperformed the private sector."

Dr. Scott McClellan, a former Stanford University economist and physician, and now Pres. Bush's White House health care advisor:

"Even with Medicare, I think that the evidence is that private plans are cheaper."

Comment: The current goal of the administration and the "bipartisan" conservatives in Congress is to privatize Medicare. Prescription coverage for Medicare beneficiaries is being held hostage to this agenda. We need more candor and honesty in the debate. If the issue were over increasing the efficiency and reducing waste in the Medicare program, the Medicare + Choice options would be eliminated immediately. Dr. McClellan, Sen. Breaux and Sen. Frist know the results of the studies. To state that private Medicare plans are cheaper is a blatant, unmitigated lie. It is time for them to speak the truth and state forthrightly that they believe that it is more important for the taxpayers to support the health plan industry than it is to assure that Medicare dollars will be utilized in the most efficient manner for patient care. If they really don't believe this, then they should initiate proposals that will improve Medicare, beginning with the termination of the exorbitantly wasteful Medicare + Choice program.

The Private Sector Council has announced that Senator John Breaux (D-LA) is this year's recipient of the Public Sector Leadership Award.

Comment: 'nuff said.