Posts tagged ‘Private Plans’
Finally, the Center’s long-time concerns about costly misuse of public Medicare funds may be gaining attention. For years we’ve been pointing to Medicare overpayments for prescription drugs and to private Medicare Advantage plans. These huge expenditures help pharmaceutical and insurance industries, not older and disabled people. If these costs were reigned in, billions of dollars would be freed to cover necessary health care and sustain the Medicare program. This week these matters received some much needed publicity:
Prescription Drug Pricing
An excellent and well-timed (given #Epi-gate) article appeared in this week’s Journal of the American Medical Association discussing the reason drug costs are so high in the U.S. According to the article, the major cause is the “granting of government-protected monopolies to drug manufacturers, combined with restriction of price negotiation at a level not observed in other industrialized nations.” Thus, state the authors, “providing greater opportunities for meaningful price negotiation by governmental payers” is one of the conclusions. A “possible solution” is described as “Price negotiation: Enable Medicare to negotiate drug prices for individual Part D plans and to exclude coverage for expensive products that add limited clinical benefit; experiment with value-based drug pricing and rational prescribing reimbursement models for Medicare.” For more information, see http://jama.jamanetwork.com/article.aspx?articleid=2545691#.V8OQC8OH7Hg.twitter
Medicare Advantage Overpayments
NPR recently published an article from the Center for Public Integrity entitled “Medicare Advantage Audits Reveal Pervasive Overcharges” (August 29, 2016) by Fred Schulte. The article reports on recently-released federal audits of 37 Medicare Advantage (MA) plans relating to overpayments made in 2007. According to the author, these “audits reveal how some private Medicare plans overcharged the government for the majority of elderly patients they treated, often by overstating the severity of certain medical conditions, such as diabetes and depression.”
As discussed in previous Alerts, including one in May 2016 entitled “Government Auditor Finds Billions in Improper Payments to Medicare Advantage Plans Coupled with Inadequate Oversight by Federal Regulator,” MA “upcoding” – when an MA plan reports an enrollee as being more sick than they actually are in order to obtain a higher risk-adjusted payment from the Medicare program – remains a problem that policymakers must address, particularly as they weigh policy proposals that would shift additional costs on to Medicare beneficiaries.
As Drew Altman of Kaiser Family Foundation wrote in the Wall Street Journal (4/15/2016):
“To some degree many changes long sought by conservatives are already happening incrementally: More than half of Medicaid beneficiaries are in private managed-care plans. Almost one-third of Medicare beneficiaries are enrolled in private Medicare Advantage Plans this year, rather than the traditional program, and the share is projected to grow to more than 40% by 2026. The same is true of private health insurance. Conservatives complain about the ACA, but their preferred vision of health insurance–with high deductibles and lots of “skin in the game” plans–is dominating in the marketplace. The trend is reinforced by many of the policies being sold in the ACA’s insurance marketplaces.”
Since 1965, Medicare has opened doors to health care and increased economic security for hundreds of millions of older people, people with disabilities, and their families.
2015 will also usher in a new Congress. Many of its leaders and members will likely champion plans to further privatize Medicare. These proposals will likely surface despite increasing reports that Medicare costs and the federal deficit are declining, and that traditional Medicare costs less than private Medicare. Once again we will likely hear about plans to transform Medicare to “Premium Support” (a voucher towards the purchase of private insurance). We will probably read about proposals to increase the age of Medicare eligibility, decrease the value of Supplemental Medicare Insurance (Medigap), redesign Medicare to make it “simpler” (but less useful for most beneficiaries). We urge you to listen carefully for these and other such plans. And respond!
Since 1986, the Center for Medicare Advocacy has been on the front lines, advocating for people who depend on Medicare and for a comprehensive Medicare program for future generations. As we mark Medicare’s 50th anniversary, help us ensure its promise to advance access to healthcare. Help us explain what’s true and what’s not, where real savings exist, and when the true interests of beneficiaries are at stake. Help us ensure a real Medicare program lasts for another 50 years.
Be part of our Medicare Truth Squad. Ask us if you have questions. Spread the word – on Twitter, Facebook – in conversations! The future of a comprehensive Medicare program may depend on it.
”The private Medicare program has been a boon for insurers the past several years, offering sizable volumes and steady profit margins. … “ It will expand in the future as Baby Boomers join Medicare Advantage plans. (Modern Health Care 12/18/2014)
Why is this allowed to continue? How can we justify cutting Medicare coverage for older and disabled people while providing ever-increasing profit margins for private insurance companies?
Wake up people!
This is a scandal. Medicare Advantage plans continue to fail beneficiaries and cost taxpayers. Why don’t more people get it – or act to do something about it?
For more, see:
U.S. Finds Many Failures in Medicare Health Plans
“Federal audits found many coverage denials for medical services and prescription drugs are poorly…” @nytimes http://t.co/59LKyqkJSe
CMS has decided to raise rates for private Medicare Advantage (MA) plans. This is contrary to its earlier announcement that private Medicare reimbursement rates would be reduced to reflect slower per capita growth in Medicare and health care. Politicians from both parties and insurance companies called for this change and, unfortunately, CMS reversed course.
So, private Medicare will continue to cost more than it would cost to serve similar beneficiaries in traditional Medicare. While this may be good for insurance companies that offer MA plans, it is not good for Medicare, the vast majority of Medicare beneficiaries, or taxpayers.
Why should we spend more of our limited public funds on private Medicare when traditional Medicare costs less? Why should taxpayers ensure private profits to deliver public Medicare coverage? After all, the experiment in privatizing Medicare was originally intended to see if a private model would cost less, while providing the same or better coverage than traditional Medicare. That was not to be.
Private plans left the market when their reimbursements were capped at or below the per capita rate of public Medicare. CMS failed to learn from that experiment, and maintain the cost of traditional Medicare as the maximum taxpayers would pay for private plans. Instead, since the Medicare Act of 2003 we actually pay private plans more than traditional Medicare. This result is not good for the financial security of the Medicare program or for the federal budget deficit. It’s not good for the vast majority of beneficiaries who continue to choose the traditional Medicare program. It’s not even best for many MA enrollees, particularly those with long-term and chronic conditions, who often get less coverage than they would in traditional Medicare. And remember, by design MA plans have limited networks, so private MA enrollees have fewer choices in physicians and other health care providers than they’d have in traditional Medicare.
The Center for Medicare Advocacy continues to call for parity in payments between private Medicare plans and traditional Medicare. It’s the best deal for taxpayers, the Medicare program, and the vast majority of Medicare beneficiaries. Common sense should prevail.
In yesterday’s Wall Street Journal, Cong. Paul Ryan weighs in yet again on “entitlement” reform. Suddenly the debate in DC is changing from demolishing Health Care Reform to the traditional Republican targets: Medicare and Social Security.
Here are Mr. Ryan’s suggestions:
• “Reform Medigap plans to encourage efficiency and reduce costs.”
What does this mean? Whose costs would be reduced and where would we find the alleged efficiency? Since we’ve heard this refrain before we know the answer: This proposal would cost older and disabled beneficiaries more. It would require them to pay more for Medicare Part B if they want “first dollar” coverage from a Medigap plan. The efficiency mentioned is based on the assumption that people will forego this kind of Medigap coverage as a result of the increased cost and then forego unnecessary health care that they would obtain if they had full Medigap coverage.
This is suggestion is based on so many false premises it’s hard to know where to begin. Importantly, Medigap policies only make payment for health care that Medicare has already determined meets coverage criteria and is medically necessary and reasonable. Medigap insurance is there to cover some of the Medicare cost-sharing for this necessary care. Without the Medigap coverage the “efficiencies” and savings Mr. Ryan lists would come as a result of older and disabled people foregoing care that is by definition necessary and reasonable.
• Combine Medicare Parts A and B so the program is less confusing.
We are all for making Medicare less confusing. The Medicare Part C and D systems, added to Medicare in 2003, dramatically increased the complexity of the program and decreased the ability of people to understand and use Medicare. But Mr. Ryan does not suggest reducing reliance on the expensive and redundant Parts C and D. He suggests combining Parts A and B. Again, we have heard these proposals before. In the guise of adding simplicity, they increase costs to the older and disabled people who rely on Medicare. While reducing costs for inpatient hospital care, especially for longer stays, the proposals to combine Parts A and B increase beneficiary costs for those services that people need far more frequently: doctors’ care and other outpatient and community-based health services.
If negotiations are returning to the ceaseless discussions about so-called entitlement reform, (which always makes me wonder who’s entitled and what do we mean by reform), we should be serious. The standard should be what’s best for older and disabled beneficiaries and the budget – regardless of the interests of insurance and pharmaceutical industries.
Anyone who truly wants to simplify Medicare and reduce costs, both worthy goals, should bring these suggestions to the table:
Combine Parts B and D. Do away with the expensive costs associated with running a Medicare prescription drug program only through private plans – or at least give people the choice of getting drug coverage through Part B, in the traditional Medicare program.
• Prohibit Medicare from paying any more for the medications it covers than Medicaid pays. The Congressional Budget Office reports this would save at least $140 billion over ten years.
• Reduce the dependence on private Medicare Part C plans.
These private plans are more expensive to taxpayers and provide less value for beneficiaries.
Case in point: Out of the blue, Connecticut residents learned today that one of the largest Medicare Advantage plans, United Healthcare, is dropping 2250 physicians from its network. This means a lot fewer providers will be available for thousands of older and disabled people – as a result of one non-appealable decision made in the best interest of private profit, not Medicare beneficiaries. Medicare Part C adds complexity and costs and should be scaled back accordingly. Beneficiaries should be encouraged to stay in traditional Medicare, which includes all physicians who participate in the program nationwide and is less expensive for taxpayers.
If Mr. Ryan and his colleagues really want to save money and reform Medicare and Social Security, while maintaining their core missions, it can be done. Let’s talk seriously – if there’s the will, there’s a way.