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Extra, Extra? No More!
March 22, 2007 • Volume 7, Issue 12Medicare would save $65 billion over the next five years if it paid HMOs and other private health plans (now known as Medicare Advantage plans) the same amount per enrollee that it costs to care for an individual covered by the government-run Original Medicare program.
That is a lot of money and the private plans don’t want to lose it.
The insurance companies have reaped record profits from the taxpayer subsidies they receive, so the companies are mounting a campaign touting the extra benefits they give to plan enrollees with the excess payments they receive. Through their trade association, America’s Health Insurance Plans (AHIP), the companies threaten to slash those benefits if Congress puts Medicare Advantage payments on par with costs under Original Medicare.
It’s blackmail.
Think about it this way: if you had an extra $65,000 and wanted to fix up your mom’s home, would you flag down the first five pickups you see, pass around the cash, and tell the guys, “Keep what you need, but make sure you spiff up the place.”
Or would you hire a contractor you can trust, who could do the highest quality work for the best price and specify exactly what work will be done?
America trusts Medicare because it provides health security year after year. And it costs taxpayers less than the private plans do.
There are no standards for the extra benefits the private plans provide. There are no limits on the amount of subsidies the companies can keep as profit. There is no reporting back of how many “extra” benefits were actually used by private plan members. And Medicare does not have an extra $65 billion to waste on the Medicare Advantage program.
That money is needed to provide real benefits to those who need them most, the most impoverished and vulnerable older adults and people with disabilities.
That $65 billion could be used to expand eligibility for the Qualified Beneficiary Program (QMB), one of the Medicare Savings Programs (MSPs). QMB pays the Part B premium and Medicare deductibles and coinsurance for people with Medicare living below the poverty line. QMB is a far better deal than the “extra” benefits available from Medicare Advantage plans—and it doesn’t require people to give up the Original Medicare program they trust for a private plan that every year can choose to change its benefits, raise its costs or pull out entirely.
In addition, people enrolled in an MSP automatically qualify for Extra Help, the federal program that helps pay the out-of-pocket costs of Medicare drug coverage for people with very low incomes. By expanding MSP, more low-income people with Medicare would qualify for Extra Help, enabling them to afford the medicines they need and avoid the dreaded “doughnut hole.”
A vague promise of extra benefits is no excuse for using scarce Medicare dollars to fatten insurance company profits. There are much better ways for Medicare to use taxpayer money to help people with low incomes afford their health care.
Medical Record
“When I retired, I picked a Medicare Advantage HMO plan that would suit my decrease in income, which is Social Security and a small pension. I am a widow with no other sources of income. The costs for my HMO have escalated to a point that I may have move from my home. The plan has already made two changes to the benefits this year. I have multiple medical conditions, including systemic lupus, rheumatoid arthritis and fibromyalgia. My co-pays have gone up. I can’t even wade through the paperwork, the coverage tiers, the referrals and the prescriptions that need to be renewed just when I need my medicine” (Story submitted to the Part D Monitoring Project, Medicare Rights Center, February 22, 2007).
“Millions of seniors and disabled Americans in Medicare could face benefits cuts or risk losing their current coverage entirely should Congress enact changes to the program based on the conclusions of the Medicare Payment Advisory Commission (MedPAC) report released today. The report examines and compares the costs of covering beneficiaries under Medicare fee-for-service and the Medicare Advantage program” (“AHIP Raises Concerns about New MedPAC Report and Its Potential Impact on Beneficiaries,” AHIP press release, March 1, 2007).
“Medicare premium revenues more than doubled to $11.5 billion during 2006 primarily as a result of this membership growth. Pretax earnings in the Government segment of $513.8 million in 2006 were 62% higher than 2005. This increase resulted primarily from the membership and associated revenue growth in our Medicare Advantage plans, partially offset by results for the new Medicare stand-alone PDP offerings” (Humana SEC filing: Annual Report, February 23, 2007).
“This option would set the benchmark [for Medicare Advantage plan payments] in each county equal to local per capita Medicare fee-for-service spending. That change would reduce Medicare spending by about $8.1 billion in 2008 and $64.8 billion over five years” (“Set the Benchmark for Private Plans in Medicare Equal to Local per Capita Fee-for-Service Spending,” Budget Options, Congressional Budget Office, February 2007).
***** The Medicare Rights Center (MRC) needs to hear about all the problems with the Medicare Part D benefit, whether they happen to you or someone in your community. With this information, we will be armed with the needed evidence to push for a Medicare-administered drug benefit.
Fast Relief: Part D Monitoring Project
Submit your story at www.medicarerights.org/partdstories.html
*****
The Louder Our Voice, the Stronger Our Message Asclepios — named for the Greek and Roman god of medicine who, acclaimed for his healing abilities, was at one point the most worshipped god in Greece—is a weekly e-newsletter designed to keep you up-to-date with Medicare program and policy issues, and advance advocacy strategies to address them. Please help build awareness of key Medicare consumer issues by forwarding this action alert to your friends and encouraging them to subscribe today.
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