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Preventing Waste and Abuse
May 31, 2007 • Volume 7, Issue 22Health care is expensive, but it is an investment well worth making. A people unwilling to ensure the health of its children, of individuals disabled by disease or accident and of older adults needs to re-examine its priorities.
Still, compassion is not incompatible with common sense.
Medicare cost taxpayers over $408 billion in 2006. People with Medicare paid over $42.9 billion in Part B premiums.
It will cost the federal government about $50 billion to extend the State Children’s Health Insurance Program to uninsured children who need coverage.
With sums like these, we need to examine whether every dollar is well spent.
That is why Congress appointed the Medicare Payment Advisory Commission (MedPAC), a nonpartisan, independent panel of experts tasked with finding out whether Medicare is paying enough, or too much, to the doctors, hospitals and other providers who care for people with Medicare.
For the last three years, MedPAC has been warning that Medicare is paying too much to private Medicare Advantage plans. For the last three years, Congress has failed to act and the overpayments have ballooned. This year, it will cost taxpayers and people with Medicare an extra $1,000 for every enrollee in a private Medicare plan than it costs to provide health care under Original Medicare for the same person.
Over the next five years, that adds up to $65 billion for the insurance companies, money that cannot be spent on children’s health insurance or on helping low-income people with Medicare with their drug and medical expenses.
It will take courage for senators to stand up to the insurance industry and their lobbyists and rein in these overpayments. The Senate’s performance this year is not encouraging. It caved to the pharmaceutical industry and refused to give Medicare the ability to negotiate lower prescription drug prices, something supported by three-quarters of the electorate.
A number of senators have begun to take a hard look at the Medicare Advantage program. For example, Senator Barack Obama, Democrat of Illinois, is calling for a stop to this “waste and abuse.” Senator Obama wants to pay the private Medicare plans the same amount it costs for providing care under Original Medicare. We hope that kind of common sense catches on.
Medical Record
“I am a volunteer SHIP counselor. I have been assisting a 92-year-old woman with her Medicare Advantage plan. She lives about 7 miles out of town and relies on neighbors to drive her to town to take care of business. She arrived in my office with a box full of correspondence and said she had been enrolled in a plan against her wishes. She said an agent had come to her door and she let him in and he tried to sell her something. She said she was happy with her supplemental and drug plans and never agreed to switch to an MA plan. She never signed anything. I called the agent, and he said the application was done on his computer and signed with an electronic signature. I then asked my client if she had given him permission to sign her name and if he had had a computer with him in her home. She said no to both” (Story submitted to the Medicare Private Health Plan Monitoring Project, Medicare Rights Center, May 18, 2007).
“Preventing waste and abuse in Medicare: Medicare’s private plan alternative, called Medicare Advantage, was established to increase competition and reduce costs. But independent reports show that on average the government pays 12 percent more than it costs to treat comparable beneficiaries through traditional Medicare. These excessive subsidies cost the government billions of dollars every year and create an incentive structure that has led to fraudulent abuses of seniors” (“Plan for a Healthy America,” Barack Obama).
“To pay MA plans appropriately, the Commission recommends that benchmarks—the basis of plan payments in MA—should be set at 100 percent of Medicare FFS expenditures. The Commission first made this financial neutrality recommendation in March 2001. For the past several years, we have analyzed payments to private plans compared to FFS and have found consistently that plan payments exceed FFS expenditure levels” (Testimony of Glenn M. Hackbarth, J.D., Medicare Payment Advisory Commission chairman, before the Senate Finance Committee, April 11, 2007).
***** The Medicare Rights Center (MRC) would like to hear about your experience, or that of someone you know, enrolled in a private health plan. With information about what the issues are with Medicare Advantage plans, we will be able to demand that those problems be fixed.
Medicare Private Health Plan Monitoring Project
Submit your story at http://www.medicarerights.org/maplanstories.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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