Friday, March 28, 2014

Granny Bird Award: Medicare Advantage Plans

The Granny Bird Award is given from time to time to those who violate or in any way harm the rights of the elders, or who use the elders to rip folks off.  Today's award goes to the Medicare Advantage insurers who rip off our precious Medicare system.

Michael Hiltzig of the Los Angeles Times put these plans in his spotlight and explains just why they are a way for insurers to take advantage of government largesse in order to turn a buck.

Here's what he had to say in his March 26, 2014 column:

A big part of the argument made by enemies of the Affordable Care Act that the Act is hurting Medicare applies to a category of health plan known as Medicare Advantage. New evidence has just come in showing that Medicare Advantage is a ripoff that fattens the health insurance industry while scarcely helping its enrollees, all at public expense. ...

Medicare Advantage plans differ from traditional Medicare by offering its enrollees ostensibly better care and sometimes broader services--free eyeglasses, even gym memberships--in return for reimbursements from the government that are 14% higher than traditional Medicare reimbursements, or more. And yes, the Affordable Care Act aims to pare the government's reimbursements for Advantage plans by a total of about $200 billion over 10 years. ...

Critics have long argued that the extra reimbursements for Advantage plans are a waste of money, just a handout to the insurance industry. A new paper by three Wharton School economists gives the critics powerful new ammunition.
The authors, Marc Duggan, Amanda Starc, and Boris Vabson, found that only about one-fifth of the extra reimbursement gets passed through to patients in the form of lower premiums, better care or more services. Where does the money go? Insurers pocket much of it as pure profit. Some they spend on advertising--to attract more Advantage members, so they can claim more of the enhanced reimbursement, which they use to advertise to get more can get dizzy following this daisy chain. ...

You shouldn't be surprised that the health insurance industry is leading the charge against Advantage cuts, terming them "devastating for seniors." Devastating to the insurers' bottom lines, they mean to say. It's important to remember that the money comes from premiums paid by non-Advantage enrollees in Medicare, and from taxpayers. 

Republicans love to portray themselves as guardians of the public purse. Yet here they are, lining up to protect one of the most wasteful claims on government resources of all. What could account for that?   [Emphasis added]

I wish I'd had this information when I turned 65 and promptly signed up for my Medicare Advantage Plan.  It even included a Part D to cover my pharmaceutical expenses.  It turns out that it only pays a fraction of the two drugs I take not covered by the hospice people, and those two drugs are expensive.  Unfortunately, I signed up again with the same plan and I'm stuck with it until the end of the calendar year (if I live that long).  Trust me:  I won't make that mistake again!

Once again, Mike Hiltzig does his job well as a consumer columnist, and for that I am grateful.

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