Tag Archives: Medicare Advantage

Why Medicare Benefits Won’t Fall

Additional analysis on what the health care legislation means for older Americans can be found on the website of the National Committee to Preserve Social Security and Medicare. Here are a couple of key points: One is on the budget impact of the reform and why Medicare benefits won’t be cut. The other concerns private Medicare Advantage plans.For the entire statement, go here.

Despite the fear mongers’ claims, Medicare benefits will not be cut to pay for covering the uninsured.  Before health reform, the federal government was projected to spend about $6 trillion on the Medicare program over the next decade.  After enactment of health reform, Medicare is still projected to spend about $5.6 trillion.  That means over the next 10 years about $450 billion less of American’s money will be spent on wasteful tests, haphazard treatment options, wasteful subsidies to private insurance companies and reimbursement policies that drive up costs without improving the quality of care seniors receive.  The rate of growth will be trimmed by about 1.0 percent over the next 10 years, from about 6.8 percent growth rate to 5.8 percent – hardly the destruction of Medicare that opponents have claimed.  

As a result, the lifespan of the Medicare Trust Fund will more than double: its solvency will be extended from 2017 to about 2026.  Medicare will continue to grow to meet the needs of an expanding older population, but it will grow at a slower rate that will more closely match the growth of the rest of the economy.  And because health reform is designed to slow the growth of costs in the entire health care system at the same time, seniors’ out-of-pocket costs will be trimmed without driving providers out of the Medicare program or creating other barriers to care. 

While these improvements are being made, health reform also provides new tools to help crack down on the fraud in the current Medicare program.  For example, by allowing the Department of Health and Human Services and the Internal Revenue Service to share information, it will be easier to stop Medicare payments to scam artists masquerading as legitimate providers.  The health reform legislation also gives the agencies more time to verify that providers are legitimate and that they have provided seniors with the wheelchairs, hospital beds, oxygen tanks and other lifesaving pieces of equipment that they are billing to the Medicare program.  Fraud in the Medicare program hurts us all by increasing costs. 

Many people worry that curtailment of the Medicare Advantage ripoff plans signals the beginning of the end, denying care to millions and–as people always warn whenever there’s government “intervention” in medicine, driving the doctors out of business. Here’s what the Committee has to say about Medicare Advantage:

Making changes in the Medicare Advantage program is another way of restoring the integrity of Medicare by reducing wasteful spending.  Medicare Advantage is the privatized part of Medicare whose growth has been fueled by the massive subsidies enacted in the Medicare Modernization Act of 2003.  Medicare Advantage plans are paid on average 13 percent more per enrollee than it costs to provide comparable care in traditional Medicare.  These subsidies, which cost over $11 billion in 2009 alone, are paid for by taxpayers and by all beneficiaries, whether or not they are enrolled in a private plan.  It is estimated that every couple receiving Medicare, including the 75 percent in traditional Medicare, will pay about $90 in additional Part B premiums this year to subsidize those in the private Medicare Advantage plans.  And although these plans provide some additional benefits, many require much higher cost-sharing from seniors for expensive services such as chemotherapy, extended hospital stays and skilled nursing home care – a shortcoming few seniors realize until they find themselves needing the service. 

Despite what some are claiming, the health reform legislation does not eliminate Medicare Advantage plans or reduce the extra benefits they provide.  The legislation simply phases down the exorbitant subsidies they are currently getting so their payments end up more in line with what it would cost traditional Medicare to cover the same seniors.  It is up to each private insurer to decide how to absorb the reduced payments, and whether to continue providing extra benefits.  The insurers who run Medicare Advantage plans cannot cut guaranteed benefits – they are required to offer all benefits covered by traditional Medicare.  And under the new health reform law, they are now prohibited from charging seniors more than traditional Medicare for expensive services.  They are also, for the first time, required to spend at least 85 percent of their revenue on patient care rather than profits or overhead.  Finally, the legislation rewards Medicare Advantage plans that are providing high-quality care by giving them bonus payments. 

Latest GOP Health Care Proposal:Opt Out of Medicare

The Republican Study Committee, which consist of more than 100 conservative members of Congress headed by Georgia’s Tom Price, have set forth a slew of proposals on health care which are sure to be used by members on the stump in 2010. The most important of these proposals concern Medicare, which the Right long has viewed as a foot in the door to socialism. At least two of the RSC committee proposals provide seniors the right to “opt out” of the program entirely. What’s more, old folks could actually get back the money they may have paid into Medicare to date.

Marsha Blackburn’s bill sets up one opt out provision. She is a conservative Republican from Tennessee who runs on low taxe and strengthening the border with fences, and she has has signed on to birther legislation aimed at appeasing the GOP, rightwing which claims Obama isn’t really a US citizen. (The bill Blackburn backs requires every presidential candidate to put up his or her birth certificate for public scrutiny before running.)

Ripping into Medicare is not only another step down the conservative path towards less government, but in this instance, opens the Medicare system to a pillaging by the insurance industry in the form of high-cost Medicare Advantage plans, along with whatever other schemes the industry can dream up. Clearly, the idea is that Medicare recipients could use the money they “get back” from Medicare to buy insurance on the private market. Medicare Part D, the presciption drug program, is already run through private insurance companies, which skim profits off premiums and co-pays, and allows drug companies to charge high prices at government expense. Serious cost efficiency would mean kicking the insurance companies out of Medicare, and having the government negotiate drug prices. Neither is likely to happen under the current health reform–or any time soon.

Exactly what is the Republican Study Committee? Organized by the late Paul Weyrich—himself one of the founders of the New Right– in 1973 as an antidote to the perceived leftish tendencies of the then dominant middle-of-the-road Republican Party, its first chair was Phil Crane, best known as a golden conservative orator who got creamed in his race for presidency against Reagan in 1980. Past members included Tom DeLay and Dan Quayle. In today’s world the RSC is all about balancing budgets, cutting taxes, and diminishing the power of the central government. The Committee’s response to hurricane Katrina was to offer up “Operation Offset,” which proposed cuts of $100 billion to cover the cost of rebuilding New Orleans. According to one independent analysis, this would have meant reducing social welfare programs to the poor—the most vulnerable group in the hurricane—by 40 percent. This cynical strategy was aimed at robbing the poor (permanently) in the name of giving to the poor (temporarily and halfheartedly). 

The fact that most of the RSC’s measures couldn’t get past the Bush administration is a measure of just how far to the right the RSC lies. And the fact that they are now taking aim at Medicare shows that the right will never rest until it destroys the only single-payer health care program this country has ever known.

A Banner Week for Big Insurance, Part II: Medicare Advantage

The so-called Baucus bill is a gift to the insurance industry in more ways than one. As I wrote earlier, it hand-delivers to the private insurance companies a whole new customer base that is government-mandated and government-subsidized. And if offers no competition in the form of a public option.

In addition, the Baucus plan preserves the Medicare Advantage program, which is one of the insurance industry’s most overt rip-offs of the public purse. As most Unsilent Generation readers will know, Medicare Advantage (MA) plans offer managed care run through private insurers, paid for by the federal government. In recent years, MA plans have come under increasing fire for their hard-sell tactics to elderly Medicare recipients, shoddy coverage, and rip-offs of the Medicare system. “Competition” from the private plans was supposed to reduce growth in Medicare spending–but in fact, they cost the government more. Recent estimates say that the government pays 14 percent more for those enrolled in Medicare Advantage vs. those in traditional Medicare. Eliminating these overpayments could save the government $177 billion over the next ten years.

Republicans (and at least one Democrat, Bill Nelson of Florida), are already complaining about the Baucus plan’s proposed cuts to MA plans. But the Baucus plan doesn’t eliminate Medicare Advantage, and might not even do it much harm. It simply introduces a new formula for calculating payments to private insurers who offer MA plans. As Tim Foley writes:

Medicare Advantage plans–private HMOs paid for by the feds at 114% the rate for a regular Medicare beneficiary but with no better health outcomes–would keep their overpayments until 2014, at which point they’d be paid the “weighted average” of all the Medicare Advantage plans combined. In layman’s terms, they’d still be getting paid more than traditional Medicare, albeit possibly less than the 14% extra they get now.

This change is rendered even more meaningless by the fact that the Obama Administration had already announced, back in April, its plans to begin incrementally cutting back on overpayments to Medicare Advantage–something it doesn’t need legislative approval to do.

Nonetheless, the insurance industry is pulling out all the stops to protect every cent they make through Medicare Advantage plans. They spent the spring and summer trying to plant astroturf on the issue by luring old people to “community meetings” (with free lunch and door prizes) where they were encouraged to “join the fight” to save the plans.

Now the insurance industry lobby group AHIP (America’s Health Insurance Plans) is offering up reports claiming that Medicare Advantage plans are especially helpful to the poor and people of color–an idea that has already been widely debunked. Cuts to MA, the report says, will hurt the most vulnerable elders.

In response, Pete Stark, (D-CA), chair of the House Ways and Means Health Subcommittee, issued a statement:

AHIP’s reports attempt to portray taxpayer overpayments to MA plans as indispensable for low-income, minority Medicare beneficiaries, when the opposite is true. These overpayments to private insurers increase premiums for all Medicare beneficiaries to pad the pockets of insurance companies….

Any report commissioned by Jay Gellert – the CEO of HealthNet and Chair of AHIP – should be taken with a healthy grain of salt, especially one claiming that beneficiaries are being helped.  Under his leadership, HealthNet has been fined hundreds of millions of dollars for illegally rescinding people’s health coverage when they get sick.

Baucus Bill: No Public Option

As expected, Senator Max Baucus released the full text of a health reform bill that was noteworthy primarily for what wasn’t there: the bill is minus a public option. As long predicted here, the legislation includes “co-ops” and “exchanges,” which are similar to the federal health employees health care plan. And Medicare Advantage stays, albeit at lesser rates.

And in return for this sellout on the most meaningful planks of health care reform, the Baucus plan has gotten…so far, not one single, solitary Republican vote.

Kaiser Health News provides a concise summary:

Senate Finance Committee Chairman Max Baucus today unveiled a health care bill that would require most individuals to have health insurance. Insurance companies could not deny health coverage based on a pre-exisiting medical conditions or place yearly or lifetime limits on coverage.

People who earn as much as 133 percent of the federal poverty level ($14,440 for an individual, $29,400 for a family of four) would be eligible for Medicaid, the government insurance program for the poor. The measure includes a health insurance ‘exchange’ where people could buy insurance and a system of health care “co-ops” rather than a government-run health insurance plan. Subsidies would help low-income workers purchase health insurance and small businesses would receive tax credits to help offset the cost of providing coverage.

The bill is projected to cost $856 over 10 years. It would be paid for with an excise tax on high-end health insurance policies, lower payments to the Medicare Advantage program and with fees on medical device manufacturers, clinical labs, drug makers and health insurance companies. Baucus negotiated the plan with five other finance committee members – including three Republicans – but no one in the GOP has endorsed the package.

Medicare–Our Single-Payer Health Care Program

The Medicare Advocacy  Center has published this concise rundown on Medicare, which is well worth keeping in mind amidst all the ads and counter-ads swirling around us:

Forty four  years ago Medicare was enacted into law. All of today’s dire warnings about a public health option – socialism and government barring the doctor’s door – were made in opposition to Medicare. Despite such opposition from “conservative,” leaders, Medicare passed because of some courageous, principled law-makers.

Before Medicare, 50% of everyone 65 or older had NO health insurance. Now, as a result of Medicare, almost all older people are insured. Medicare, which is national, government-run health insurance, succeeded in insuring older people where private insurance failed. Further, until the Bush Administration privatized Medicare with huge subsidies to private “Medicare Advantage” and Part D plans, Medicare was also remarkably cost-effective. It’s private Medicare, not the traditional, public program, that’s bleeding taxpayers of billions of dollars.

Medicare has been a success, fiscally and morally. It took on the job of insuring health coverage and care to people that private insurance had abandoned. Since 2003, on the other hand, private Medicare plans have cost us all tens of billions of dollars that went to support the private insurance industry, not to providing health care. In addition, private Medicare plans have too often engaged in marketing abuses and restrictive coverage practices.

As numerous studies have shown, people with Medicare love it. They do not want government to fool around with the traditional program. Ironically, some people with Medicare are arguing against a public health care reform option–while also telling the government “to keep its hands-off their Medicare!” They, and their family members, (which accounts for pretty much all of us), forget that the traditional Medicare program is a public health insurance option.

Meet Medicare: Our 44 year-old public health insurance option that provides care to all its enrollees everywhere in the country, and that has provided health and economic security for millions of older people, people with disabilities, and their families. For two generations, the public Medicare program has shown what a true public insurance program can offer: health insurance for the otherwise uninsured, at a price that taxpayers can afford.

Now, for all generations, we need a public option in health reform!

Drug Store Cowboys

News reports are touting Obama’s determination to advance health care reform, regardless of Republican resistance. But developments taking place behind the public debate tell quite another story, and show the usual suspects–the drug companies and the insurance industry–hard at work to advance their own interests.

Consider, for example, last week’s AARP study showing that Big Pharma has been increasing the prices of the brand name drugs most often prescribed to older Americans at well beyond the rate of inflation. According to an AP account of the report, AARP “said that prices manufacturers charged for the most widely used brand name drugs rose 8.7 percent in 2008, higher than in years past. The general inflation rate in 2008 was 3.8 percent.”

Perhaps the drug companies are acting out of sheer greed in a deep recession. Perhaps they know that patents are running out, and want to make as much as possible before the plug gets pulled. Or perhaps the drugsters sense impending change and want to rake in the cash before Congress pulls the plug.

In any case, they offer, as some sort of consolation prize, the fact that generic drug prices are falling. Of course, thanks to the generous patents handed out to Big Pharma even for lifesaving drugs, generics do not exist for many prescriptions. And there is another problem: generic equivalents sometimes turn out not to be equivalent, after all. An increasing body of evidence shows that small differences in their chemical makeup, which are allowed by law, can affect the way they work. So many patients are left with no other choice than to shell out for the brand names.

A second troubling development in the area of prescription drugs arises out of the continuing scams run by private Medicare Advantage plans. Now the pharmacists are getting cut into the act. By hooking up with insurance companies running Medicare Advantage plans, pharmacists get to charge consultant fees for telling people which drugs to take, and how, and when, and even for “making recommendations to physicians”–especially if the drugs they recommend happen to be cheaper.

The Kaiser Daily Health Policy Report, citing reporting by the Tennessean newspaper, notes that “pharmacies’ income typically comes from adding an additional fee to the price of medications. However, as profit margins decline, consultations are becoming another way for pharmacists to bring in additional revenue.” Here’s how it works, according to rules established by the Center for Medicare Services (CMS), the government agency that oversees the program:

Under existing CMS guidelines, insurers that offer Medicare Advantage plans are required to pay pharmacies for the meetings with patients, during which they discuss the importance of taking the proper medications at the appropriate times….Some pharmacists now earn up to $160 for a one-hour meeting with patients….

In 2010, new CMS guidelines will broaden the pharmacy consultation benefit to more MA beneficiaries. Under the revised guidelines, MA plans will be required to review their member rolls on a quarterly basis to identify eligible members for the program. In addition, health plans will be prohibited from restricting access to the benefit to members with a high number of chronic health conditions and medications….

The idea of the friendly neighborhood druggist watching out for local elders might seem appealing on the surface. But these days, of course, its mostly faceless chain stores that provide medications to Medicare recipients. And these drug stores are are being given something like a backdoor license to practice medicine, doing work that doctors ought to be doing–at a much cheaper price.

Controlling cost, after all, is what it’s all about, rather than the benign task of ensuring that oldsters “take the proper medications at the appropriate times.” As Kaiser reports, “Pharmacists will be paid $50 to review a beneficiary’s medications and make recommendations to their physician. Pharmacists will receive additional payments if they recommend a less-costly, therapeutic equivalent to the patient.”

It occurs to me that these two bits of news show the pharmaceutical industry and insurance industry working at cross purposes:  While the drug companies are doing everything they can to profit off of costly brand name drugs, the insurance companies are coming up with new strategies for moving patients to less expensive alternatives.  Maybe we should just step back and let the two industries fight each other to the death, to the vast benefit of the American health care system.

Insurance Industry Plants Astroturf for Medicare Advantage

With the subsidies to Medicare Advantage plans under attack by the Obama administration, the insurance industry is rolling out the astroturf. Their PR campaign posits a phony “grassroots movement” by seniors who want to protect their beloved Advantage plans from a greedy federal government, which has had the gall to ask insurance companies to provide decent coverage at a reasonable cost.

I recently wrote about the fake “community forums” for oldsters, complete with free food and door prizes, that are actually cheerleading and sales sessions for Medicare Advantage. The latest scam is even creepier–and it’s being run by a former operative in John Kerry’s presidential campaign.

A Massachusetts newspaper, the Eagle-Tribune, recently discovered that it was receiving phony letters to the editor supporting Medicare Advantage, using the names of real elderly people as signatories. “Some of those seniors are unaware that they have sent any such letters to newspapers. Some of them hadn’t even heard of Medicare Advantage,” writes Ken Anderson, a reporter for the paper.

“I did not write a letter to the editor. It’s not from me,” said Gloria Gosselin, 75, of Lawrence. Gosselin’s name was on one of three strikingly similar letters touting the Medicare Advantage program that were sent to the Eagle-Tribune….

One of the letters came from William Morin of New Bedford and was addressed to the “New Bedford Eagle-Tribune.” No such newspaper exists. The street address on the letter was that of The Eagle-Tribune’s North Andover office. “I wonder who did that. New Bedford Eagle-Tribune — I’ve never heard of it,” said Morin, who is 88 years old.

A letter supposedly from Ana Abascal of Lawrence said she “wanted to express how important my Medicare Advantage health plan is to me and other fixed-income seniors in my community.” But when contacted by The Eagle-Tribune, Abascal was shocked and concerned to learn someone was using her name on a letter to the editor. She did not know what the Medicare Advantage plan was.

Here’s how the paper figured out what was really going on:

A tip-off to the true origin of the letters came when the Eagle-Tribune received a call from a man who turned out to be an intern at the Boston office of the Dewey Square Group, a national political marketing and consulting firm. The man, who identified himself as Noah, wanted to know if Gloria Gosselin’s letter had been published. Asked what interest he had in the letter, Noah replied that he was Gosselin’s grandson. Gosselin does not have a grandson named Noah working in Boston….

The Dewey Square Group was founded in 1993 by three veteran Boston political campaigners with Democratic ties. One of the founders, Michael Whouley, was a strategist on John Kerry’s 2004 presidential campaign. The group was hired by America’s Health Insurance Plans, an industry trade group.

Spokespeople for Dewey Square told the Eagle-Tribune the campaign is legit and maybe the letter writers’s memories were playing tricks on them. They might have come to one of Dewey Square’s senior meetings where Medicare Advantage was pumped up, and just forgotten. “No one’s trying to pull the wool over anyone’s eyes,” a company spokeswoman said.