'Medicare Advantage' a misnomer
Taxpayers foot bill for private insurance to inadequately cover seniors’ health care
Jonathan D. Walker
The Journal Gazette
November 10, 2008
America has a split personality when it comes to health care. There is recognition that the government has to provide care for the people, but there is a conflicting sense that private industry has to be involved because it can somehow be more efficient. Medicare Advantage is the upshot of this thinking — but the result has been a lot of taxpayer dollars wasted on windfall payouts to private insurance companies.
With Medicare Advantage, the government is basically paying private insurance companies more money to do what Medicare could be doing more cheaply and more efficiently in the first place — if we as citizens asked it to. A lot of this extra money is not used to help the people Medicare is supposed to be helping.
Instead, the money is wasted on administrating, marketing and generating profits for insurance companies. In other words, the government is using our tax dollars to pay for the “privilege” of bringing in all the hassles of private health insurance into Medicare.
The confusing array of plans can cause less sophisticated shoppers to get stuck with very bad plans that increase their co-pays and force them to change doctors and hospitals. Careful consumers can get what seems to be a good plan because the insurance companies can use some of the money they get from the government to offer extra benefits and services.
But even smart shoppers can get into trouble. If they get sick, they will suddenly get hit with the large deductibles that go along with these plans — often thousands of dollars. To avoid these costs, patients switch back to standard Medicare once they become ill.
This scenario turns out to be a great advantage for the private insurance companies that run the Medicare Advantage plans. They use our tax dollars to get paid to do what the government could do for less, and they make even more money by covering only the healthiest seniors.
It gets even more frustrating because the healthy seniors who are getting a great deal at taxpayer expense are understandably reluctant to modify the system (as long as they stay healthy). Whenever Congress threatens to cut back on Medicare Advantage, the insurance companies can call on these seniors to contact their representatives and halt any changes.
Multiple sources have shown that the Medicare Advantage program is a waste of money, including the Medicare Payment Advisory Commission (Congress’ advisory body on Medicare payments) and the Congressional Budget Office. According to the Government Accountability Office, Medicare Advantage plans cost taxpayers 12 percent more per recipient than standard Medicare. They estimate it will cost an extra $54 billion by 2112 — about what it would cost to provide all children in America with health insurance.
And it is not just a problem of wasted taxpayer dollars. The profit motive has resulted in terrible abuses, especially with patients who have limited abilities to understand the complexity of these plans. In a hearing in 2007, Sen. Herb Kohl, D-Wis., said, “Our investigation has revealed a disturbingly consistent picture, one which only seems to be growing. Countless seniors purchasing Medicare Advantage plans have been preyed upon and unwittingly taken advantage of by insurance agents. Seniors have been removed from traditional Medicare without their knowledge, signed onto plans they can’t afford, misled regarding coverage and told their doctors accept these plans when in reality they don’t. This is simply unacceptable.”
America’s health care system is in enough trouble without wasting resources on inefficient programs that don’t give us our money’s worth — simply because powerful lobbyists get these programs enacted and then keep the programs from being cut. When organizations like the Congressional Budget Office, the Government Accountability Office and the Medicare Payment Advisory Commission tell us that there is no advantage to Medicare Advantage, we should listen.
Jonathan D. Walker , M.D., is a member of Hoosiers for a Commonsense Health Plan. He wrote this for The Journal Gazette.