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Our Sick Health Care System
June 14, 2007 • Volume 7, Issue 24At the end of this month, Sicko, a new Michael Moore movie documenting how insurance companies’ focus on quarterly earnings leads them to deny care for their members, opens in theaters nationwide. Humana and Kaiser Permanente are featured in stories that describe how decisions to deny care resulted in the death of patients covered by these plans. These two companies also happen to be among the private Medicare plans that boast the highest enrollment.
Around the same time, the Senate Finance Committee will decide whether to hand the Medicare program over to these and other insurance companies. The committee will have to decide whether to curtail excessive subsidies to private Medicare plans that are putting Medicare on a path toward privatization.
If the overpayments are not reined in, enrollment in private Medicare plans is expected to nearly double over the next 10 years and could well exceed that projection as plans lure employers with taxpayer-subsidized premiums for their retirees. Instead of the security, peace of mind and guaranteed health coverage provided by Original Medicare, over 14 million people with disabilities and older adults will have decisions about their health care held hostage to the drive for dollars of insurance companies.
The excess subsidies to private Medicare plans distort the “choice” people with Medicare face between Original Medicare and a private plan. Those overpayments—private Medicare plans cost taxpayers an extra $1,000 a year for every individual they enroll—fund marketing campaigns, cut-rate premiums and benefit packages designed to lure people with Medicare, especially the low-cost, healthier individuals, into the private plans.
It is not that people with Medicare are incapable of making a wise choice; it is that the system is rigged to prevent an informed choice. Prospective enrollees cannot know what illness will hit them in the future and will only find out what restrictions the plan places on the treatment they need after they are locked in to the plan. For the fastest growing and most overpaid type of private plan—private fee-for-service plans—there is no oversight by the government of these “utilization management” restrictions. It’s like buying a car without being able to test the brakes; it’s a potentially fatal choice.
There are no real minimum standards for benefits a private Medicare plan must provide. A healthy, well-off consumer may find it appealing that the plan will cover health care expenses incurred during a trip to France, but if a stroke leaves her bedridden she may discover the plan charges high copayments for home health care, a benefit Original Medicare provides for free.
The overpayments to private plans also put the financial health of Original Medicare at risk by increasing the cost of the program. In addition, these overpayments force everyone with Medicare to pay a higher monthly premium. Overpayments to private plans will drain $149 billion from Medicare over the next 10 years, money that could be used to provide assistance with out-of-pocket spending to low-income people with Medicare and to provide insurance to the nine million children who now have no health care coverage.
Moore’s new movie exposes the havoc that private insurance companies have wreaked on America’s health care system. Medicare serves as the example of the greater efficiency and stability that a government-administered program can provide and can serve as the basis for a system that works to insure everybody. But if Congress refuses to stop insurance companies from bilking the program, then Medicare won’t exist either as the model for fixing our health care system or as the source of health security for millions of older adults and people with disabilities.
Medical Record
For more information on how Medicare private health plans can fall short on people’s needs, see “Too Good to Be True: The Fine Print in Medicare Private Health Plan Benefits,” Medicare Rights Center, April 2007.
“She was vomiting, had diarrhea, and was having trouble breathing, and a very high temperature. I called an ambulance, which took her to the nearest emergency room at Martin Luther King/Drew Medical Center Hospital in Los Angeles. The doctor believed that she probably had a bacterial infection, which could be treated with antibiotics, but he did not conduct a simple blood culture or treat her with antibiotics, because our health plan, Kaiser, told him not to. You see, Martin Luther King hospital was not a Kaiser facility. Kaiser said the simple test and treatment had to be done in a Kaiser hospital. But Michelle became sicker and sicker. She became lethargic and unresponsive. I pleaded for her treatment and no one would give her antibiotics. Over two hours later Michelle had a seizure. Finally an hour after that Michelle was transferred by ambulance to Kaiser. Within 15 minutes of arriving, she died” (Testimony of Dawnelle Keys at legislative briefing held by California State Senator Sheila Kuehl, June 12, 2007).
“I work with renal transplant patients who are in need of daily medications that are very expensive. Patients who are enrolled in Humana Medicare plans were surprised this year when their copays on anti-rejection medications rose from approximately $55 per month for one medication to 25% of the cost. For one individual this 25% amounted to $380 per month for one medication. Because these medications are covered under Medicare Part B, they are not covered under Medicare [Part] D plans. A few patients have been assisted through the Pharmaceutical Assistance Program, but some had to be switched to a medication that was not preferred by their doctors” (Story submitted to the Medicare Private Health Plan Monitoring Project, Medicare Rights Center, April 26, 2007).
“I am a private medical claims advocate with a client enrolled in Kaiser's Senior Advantage Plan. My client had a $3,000 maximum under her plan, and she incurred that in hospital and doctor copayments, but Kaiser continued to make her liable for copayments beyond that because she hadn't been financially able to pay the full $3,000 yet. Kaiser's policy is that the patient has to bring actual receipts to the facility showing she has paid out the $3,000 before they will stop assigning copays. My client was sent to non-Kaiser hospitals for mental health care and couldn't afford to pay the outside hospital copays. Kaiser didn't care and said she had to literally pay out $3,000 before they would stop making her liable for copayments. I called Kaiser, but they wouldn't budge and clearly didn't care. Since the patient couldn't afford to pay the $3,000, they said she could apply for a low-income waiver of her internal Kaiser copayments, but it wouldn't apply to the outside facilities and she wouldn't meet her max so she would still owe the outside facilities. We also contacted the outside facilities to try and hold off collections and make payment arrangements” (Story submitted to the Medicare Private Health Plan Monitoring Project, Medicare Rights Center, April 26, 2007).
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Submit your story at http://www.medicarerights.org/maplanstories.html.
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