Posts filed under ‘Public Option’
Private Medicare Plans Are Taking You to the Cleaners. Cut the Subsidies Now! And Don’t Repeat This Windfall in Health Care Reform.
| New Report Highlights Medicare Advantage Insurers’ Higher Administrative Spending | |
| Publications | |
| Wednesday, 09 December 2009 11:51 | |
| Today Energy and Commerce Committee Chairman Henry A. Waxman and Oversight and Investigations Subcommittee Chairman Bart Stupak released a new report which found that 34 Medicare Advantage insurers expend significant sums on profits, marketing, and other corporate expenses. Last year, the insurers spent an average of $1,450 per beneficiary on profits, marketing, and other corporate expenses, nearly ten times as much as traditional Medicare spent on administrative expenses per beneficiary.On average, Medicare Advantage insurers spent over 15% of premium revenue on profits, marketing, and other corporate expenses. Two-thirds of the Medicare Advantage insurers surveyed by the Committee had a “medical loss ratio” – the percentage of premium revenues used to pay medical claims – below 85% during at least one of the four years examined. In contrast, traditional Medicare spends 98% of its money on medical care. If all Medicare Advantage plans had spent at least 85% of their premium dollars on medical care from 2005 to 2008, they would have spent an additional $3 billion on medical care for seniors.”Medicare plays a critically important role in insuring that millions of Americans receive the health care they need,” said Rep. Waxman. “But as this report shows, Medicare Advantage insurers are squandering billions of dollars on overhead costs – in fact, they spend ten times the amount per beneficiary as traditional Medicare. Our health care bill includes much needed reforms to the Medicare Advantage payment system. There is no reason for Medicare to pay private insurers more than traditional Medicare pays in any community in the country. That will insure that taxpayer dollars are spent wisely.””Medicare Advantage was never intended to be a program for insurance companies to pad their corporate expense accounts,” said Rep. Stupak. “Seniors pay Medicare Advantage premiums with the expectation that the money will be used to provide critical medical care – not pay for marketing campaigns and executive bonuses. The disparity between the percentage of premiums used to pay medical claims in traditional Medicare and Medicare Advantage is unacceptable; our seniors deserve better. This report is just the latest example of private insurance companies exploiting the Medicare Advantage system for their own gain.”At the request of Chairman Waxman and Subcommittee Chairman Stupak, the majority Committee staff analyzed premium revenues, medical claim payments, marketing costs, profits, and other data from 34 major Medicare Advantage insurers.
The report found:
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ANSWER to Pop Quiz! Who Said This? About What?
As a spokesman for the AMA, Ronald Reagan said this about the dangers of passing Medicare: “… behind it will come other federal programs that will invade every area of freedom as we have known it in this country. Until one day, as Norman Thomas said, we will awake to find that we have socialism. And if you don’t do this and if I don’t do it, one of these days you and I are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.”
Ronald Reagan, our beloved Republican president, said this as a spokesman against Medicare. Now Republicans laud Medicare, say they are its champion, but say that health care reform must not pass as it will lead to socialism and the demise of Medicare. There is little new under the sun!
Tell your senators to vote for health care reform – with a public option. Like Medicare it is desperately needed and, if passed, it too will become a beloved institution.
Someone, someday, will thank you for fighting for it and will praise your senators’ votes.
Connecticut’s Senators, Health Care Reform, and Lessons From Medicare
The Center for Medicare Advocacy is incorporated and headquartered in Connecticut. People from this state can be proud of the courage our senior senator, Chris Dodd, has shown in leading health care reform. As a leader of the Senate’s efforts, Senator Dodd is once again speaking and fighting for real reform, to include a public option. We urge our other Senator, Joe Lieberman, to review the true costs and principles involved in this historic opportunity to insure all Americans, and to vote along with Senator Dodd for real health care reform.
The Center has been representing people with Medicare since 1986. We know what we’re talking about when we talk about the benefits and costs of public health insurance.
Medicare is public health insurance. It brought basic health coverage to older people in 1965, when 50% of people over 65 had NO insurance because the private market didn’t want to insure them. All the arguments being made now against health care reform and a “public option,” were also made against Medicare before it passed. Medicare was hardly bi-partisan legislation; it barely passed.
Now most everyone appreciates Medicare and the health and economic security it brings to older people and their families. We can only hope Congress, and both of our Connecticut senators, will vote courageously again, as those before them did to enact Medicare. This time we call upon Congress to bring health and economic security to younger Americans by voting for health reform – with a public option.
Private Medicare Plans – Bullies On The Playground?
Medicare “Advantage” private plans were created not-equal in 2003. Not equal to “regular Medicare” because the law gave private plans a windfall of about 14% more per covered beneficiary than is paid for the same coverage in regular Medicare. We have all been paying for this – to the tune of about $10 billion a year! So, if paying the private plans the same as the traditional program means they take their balls and go home, so be it. We simply can’t afford to pay for the kind of profit the private plans seem to insist they make at the expense of Medicare and taxpayers.
The Center for Medicare Advocacy has long been concerned about the extraordinary costs of private Medicare. The movement towards fragmenting and privatizing Medicare was advanced by the Medicare Act of 2003.The lessons from privatizing Medicare should be applied when developing health care reform: No matter how much some people may want to believe that the private market is always a more cost-effective model than a public program, it just isn’t so. Medicare proves the point.
• When Medicare private plans were paid 95% of what it costs to provide the same coverage in the public Medicare program, they left the program in droves. They couldn’t make enough profit. (“Medicare+Choice,” enacted in 1997 as part of the Balanced Budget Act of 1997.)
• Under the “Medicare Advantage” program, passed in 2003, private Medicare plans are paid about 14% more than the same coverage would cost in the traditional public Medicare program. And, not surprisingly, private insurance plans have flocked back into the system. The insurance industry is making a windfall from this system – at the expense of all Medicare beneficiaries, including the vast majority of beneficiaries who still choose “regular Medicare.” Taxpayers overpay too. (CBO, MedPAC, Commonwealth Fund.)
• The private Medicare plan program is bleeding the Medicare trust fund, reducing Medicare’s solvency by about 8 years.
If Congress passes a requirement that all Americans have health insurance, but does not provide for a public option, we will have been taken to the cleaners yet again. Private insurance will gain tens of millions of new customers and we taxpayers will all pay a much higher bill than is necessary. Medicare’s experience proves this.
Meeting With The First Lady About Health Reform
Like many of you, I am a mother, a wife, a daughter – and now, amazingly, a grandmother. I am also a lawyer and I run this small business, the Center for Medicare Advocacy. The Center is a non-profit organization founded in 1986. We represent older and disabled people with the focused mission to ensure fair access to Medicare and quality health care. So I know something about advocating for health coverage.
Michelle Obama is hosting a meeting about health care reform and women on November 13th. Wonderfully, the Center has been invited to participate. So tomorrow I’m going to Washington to tell my story to the First Lady.
I’m healthy. I tend not to catch the various viruses that run through my office and community. I exercise, eat a largely vegetarian diet, live an engaged life, and get the recommended medical and dental check ups.
So I was taken by surprise when I was diagnosed with Breast Cancer four years ago. I had a mammogram just a few months earlier. But the bottom line is, stuff happens. We’re all human, and human beings get sick, even if they do “all the right things,” and take care of themselves. From a person who rarely saw doctors, I became a full-time patient. Even now, four years later, I am involved with treatments and tests far more than I like.
It is silly to suggest that people over-utilize health care because they have health insurance. Yes, my insurance covered most of my care. But many of these tests and “procedures” are painful and many of the medications have dreadful side-effects. No one would choose this.
On the other hand, a lack of insurance authorization almost led me to skip important care. However, because I knew how to pursue an appeal, I obtained authorization and proceeded with the treatment – a good decision since I almost needed a transfusion even with them.
I continue to be faced with decisions about follow up treatment and insurance coverage obstacles. I have had to urge my doctors to make their best medical decisions and to leave the insurance battles to me. But if I were not a lawyer who has been fighting for proper health insurance for other people for 30 years, I might not be getting the treatments I need.
My story is only different from everyone else’s because I do have insurance and because I am a professional advocate. We all get sick, we all get injured. But we don’t all have insurance, and we aren’t all health care lawyers.
All women, all people, need health care and we all need help paying for it. This is particularly a woman’s issue because we live longer with more chronic conditions than men and because we are often primary caregivers – for our kids, our spouses, and our parents, all of whom get sick.
I’m telling my story because I’m told it may help. Tell yours too. We need quality health coverage – including a public option – for everyone. I know this as a woman, a patient, and an advocate. As the First Lady suggests, we need to make our voices heard now.
Urge Congress to seize this opportunity to provide health care security for everyone. Pass health care reform this year!
Congratulations America: Healthcare Reform is Moving Forward
The Center for Medicare Advocacy is grateful to those who courageously voted for the Affordable Health Care for America Act, H.R. 3962. This legislation goes a long way towards ensuring for all Americans the peace of mind that was brought to older people and their families with the passage of Medicare in 1965.
Medicare itself is based on the notion of a shared a public/private undertaking and of pooling resources for the common good. In Medicare’s case, the common good is that of older people, people with disabilities and their families. The Affordable Health Care for America Act advances the common good to all Americans by expanding access to health care to America’s uninsured and by implementing private market insurance reforms.
Among other things, the legislation passed by the House of Representatives will:
- Provide affordable health insurance options for those currently without coverage;
- Provide a Public Insurance option to provide competition with private insurance and keep costs down for individuals and taxpayers;
- Prevent insurance companies from denying coverage to those with pre-existing conditions;
- Prevent insurance companies from dropping the coverage of those who get sick;
- Prohibit insurance companies from having life-time limits on benefits;
- Ensure that insurance companies offer real value for premiums paid;
- Strengthen Medicare for the more than 44 million older people and people with disabilities who currently use the program and for future generations of beneficiaries;
- Improve Medicare’s payment to doctors and thus ensure that Medicare beneficiaries can continue, as they do now, to see the doctor of their choice or find a doctor if they need one;
- Require Medicare, as well as private insurance, to provide preventive benefits without application of cost-sharing;
- Promote care coordination in Medicare – especially for those with multiple chronic conditions – through various pilot projects;
- Improve access to Medicare-covered services for low-income beneficiaries by strengthening the programs that serve these individuals;
- Lower drug costs for Medicare beneficiaries by closing the Medicare Part D “Donut Hole” coverage gap
- Lower drug costs for Medicare beneficiaries by allowing the government to negotiate for lower drug prices with pharmaceutical companies;
- Provide benefits to help older people and people with disabilities live in their own homes and communities by establishing the Community Living Assistance Services and Supports (CLASS) program.
The Center for Medicare Advocacy applauds President Obama, Speaker Pelosi and all members of the House of Representatives who have worked so hard to bring this legislation to life. We urge the Senate to follow suit soon!
Say It Ain’t So, Joe
We hear that Senator Lieberman is prepared to join Republicans to filibuster against health care reform if it includes a public option. We can’t understand our Senator’s position.
The Center for Medicare Advocacy is a Connecticut-based organization with over 30 Connecticut employees. We have worked for decades to advance fair access to health coverage and care for residents of Connecticut. We have seen the painful ramifications when Medicare private plans came and went from Connecticut – leaving tremendous financial and emotional costs in their wake. In one case, a Medicare beneficiary died at a forum about a private Medicare plan that was leaving Connecticut! We were there.
As Senate Majority Leader Harry Reid said when he announced Monday that the bill he will bring to the Senate floor will include a public option, “I’ve concluded … that the best way to move forward is to include a public option with the opt-out provision for states. .. The public option, with an opt-out, is the one that’s fair.” ( Read more here.)
The public option is necessary to provide fair access to quality health coverage at a price taxpayers can afford. We know that from Medicare. We know that in Connecticut. We urge our Senator to rethink his position.
So Far, So Good!
We post below announcements from Senator Chris Dodd and Majority Leader Harry Reid about the inclusion of a public option in the merged Senate health care reform bill. Why? Because this is the latest news from key Senate leaders and, because this is good news for people in need of health coverage – and for taxpayers. Maybe right will yet prevail over might. We dare to hope.
DODD STATEMENT ON PUBLIC OPTION
WASHINGTON, DC – Senator Chris Dodd (D-CT) released the following statement today after Majority Leader Harry Reid announced that the health care reform legislation will include a strong public option.
“I fought for a strong public option – in the HELP Committee and in this merger process – because it is the best way to keep costs low and insurance companies honest,” said Dodd. “Majority Leader Reid has made a bold and right choice to endorse the HELP Committee public option, along with a provision allowing states to opt out. At its core, health care reform is about making insurance more stable and affordable for those who have it, and available to those who don’t, while improving quality and lowering costs. I believe that the public option is a key component to successful reform, and I will continue to lead the fight for it on the Senate floor.”
Note: Senator Dodd led the Health, Education, Labor, and Pensions Committee earlier this summer when it approved the Affordable Health Choices Act, which included the strong public option that will be included in the final health care bill.
AND, FROM MAJORITY LEADER, SENATOR HARRY REID
“The last two weeks have been a great opportunity to work with the White House, Senators Baucus and Dodd, and members of our Caucus on this critical issue of reforming our health insurance system. We have had productive, meaningful discussions about how to craft the strongest bill that can gain the 60 votes necessary to move forward in the Senate. I feel good about progress we have made within our caucus and with the White House, and we are all optimistic about reform because of the unprecedented momentum that exists.
I am well aware that the issue of the public option has been a source of great discussion in recent weeks. I have always been a strong supporter of the public option. While the public option is not a silver bullet, I believe it is an important way to ensure competition and to level the playing field for patients.
As we’ve gone through this process, I’ve concluded, with the support of the White House and Senators Baucus and Dodd, that the best way forward is to include a public option with an opt-out provision for states. Under this concept, states will be able to determine whether the public option works well for them and will have the ability to opt-out.
I believe that a public option can achieve the goal of bringing meaningful reform to our broken system. It will protect consumers, keep insurers honest and ensure competition and that’s why we intend to include it on the bill that will be submitted to the Senate for consideration.
We have spent countless hours over the last few days in consultation with Senators who have shown a genuine desire to see reform succeed, and I believe there is strong consensus to move forward in this direction. Today’s developments bring us another step closer to achieving our goal of passing a bill this year that lowers costs, preserves choice, creates competition and improves quality of care.”
Dear Senator Dodd
We have avoided adding to the myriad requests we know you must be getting now that you are helping to develop a final Senate health care reform bill. But, it’s quickly becoming now or never, so we write about two of our main concerns:
- The Center for Medicare Advocacy is concerned about the Medicare Commission that the White House seems to envision and that the Finance Committee passed. While we understand the value of a payment commission from some points of view, we, and others who represent Medicare beneficiaries, are terribly concerned about provisions that would essentially empower an unelected Commission to cap Medicare funding. There is no justification for such unilateral Medicare cost-containment. (Except regarding private Medicare Advantage. We have been stating, and will continue to explain, that cuts to the outlandish, wasteful Medicare Advantage subsidies are completely justified.) A Commission empowered to cap overall Medicare funding threatens the future of the traditional Medicare program and is dangerous to older and disabled people. This is sadly ironic since such a Commission could essentially create the very kind of privatized, capped Medicare program that Newt Gingrich envisioned when he said that, “while we may not be able to kill Medicare, we can make it wither on the vine”.
- As you know, the Center for Medicare Advocacy is highly supportive of a real public option in health care reform. We are grateful for your active support for this key component of true reform. We know all too well how private Medicare Part D and Medicare Advantage plans have often abused the system, profited the insurance industry, and endangered the financial well-being of traditional Medicare. To replicate this system by having a private – only – health care reform system is simply to repeat history and to once again give away taxpayer dollars to big industry.
Thank you for all you are doing to bring health care access to all and reason to the health care system. Please let us know if we can help.
Senator Dodd Will “Fight For a Strong Public Option”
Senator Chris Dodd (Dem. Conn) posted this statement on Daily Kos in advance of the meetings he will have with Senator Baucus, Senator Reid, and the White House next week in order to hash out a compromise health care bill to send on to the full Senate. He sent his editorial on to us for CMA’s health policy blog. At the request of the late Senator Ted Kennedy, Senator Dodd chaired the Senate HELP Committee’s work leading to passage of a health care reform bill in July.
“A Moment To Be Bold
By SenChrisDodd <http://senchrisdodd.dailykos.com>
Fri Oct 09, 2009
Next week, I’ll sit down with Majority Leader Reid, Finance Committee Chairman Baucus, and the White House to merge together the provisions of the two health care bills that have been passed by Senate committees.
I’ll be there as the representative of the Senate Health, Education, Labor, and Pensions (HELP) Committee, but I know that I’m also carrying with me the responsibility of speaking up on behalf of millions of passionate activists – without whose efforts we wouldn’t have a President who has made reform a top priority, not to mention enough Democrats in Congress to pass a bill.
I understand that many of you are worried about what that bill will look like. I know first-hand how frustrating it has been to watch good ideas clash with political realities, especially on such an important issue.
The HELP and Finance Committees worked on different pieces of the bigger reform puzzle. My committee passed strong prevention, quality, workforce and long-term services and supports measures. Finance worked to strengthen Medicare and help small businesses afford and purchase health insurance for their workers.
Sometimes, our two committees overlapped. We both agree that insurance companies shouldn’t be allowed to deny coverage for pre-existing conditions, discriminate against women or the elderly, implement annual or lifetime caps on the benefits you can receive, or take away your coverage when you need it most.
That’s something we all agree on – and that’s a pretty good place to start from as we merge our two bills.
But we have come too far, and worked too hard, to settle for “pretty good.” And that’s why I plan to take a stand.
First, and let me be very clear about this: I am going to fight for a strong public option. The simple, undeniable fact is that a public option will save money – and it will introduce more choice and competition into an industry that badly needs both. It is the single best way to keep costs low for middle class families – and keep the insurance companies honest. And I am by no means ready to back down on making that argument.
There are some other issues to hash out, as well. I believe that we should require everyone to get health insurance, just as we require everyone to get auto insurance. But I also believe that it is unfair to burden middle class families with a mandate they can’t afford. I think the HELP bill has especially strong provisions to keep costs low and quality high, and I think they’re worth fighting for.
When we sit down with the White House to merge these bills, it will be an historic moment – one more unprecedented step towards finally overcoming the well-financed special interests and achieving the reform that has eluded us for more than 60 years. It will be a moment to celebrate how far we have come – but also a moment to be bold as we take the final steps towards reform.
It will be a negotiation, and I can’t promise that every disagreement will be resolved in our favor.
But I can promise that I will walk into that room prepared to fight for a strong public option, affordability provisions that protect the middle class, and common-sense protections to keep the insurance companies honest and guarantee that every American family can choose a health care plan that’s right for them.
The finish line is within sight. And I, for one, am ready to hit it running.”
CMA Health Policy Blog 