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A True Community of Interests
July 12, 2007 • Volume 7, Issue 27More than nine million children in the United States lack health insurance. Instead of providing them coverage by expanding the State Children’s Health Insurance Program (SCHIP), President George W. Bush doesn’t even want to give the program enough money to continue coverage for all the children currently enrolled. Leaders in the U. S. House of Representatives, along with most advocates for the nation’s poor children, support authorization of $50 billion over the next five years to enable SCHIP to provide health care to two-thirds of America’s uninsured children. But unless Congress reauthorizes SCHIP in the coming weeks, the program, which served 7.4 million people last year, will end September 30.
Why does this matter to people with Medicare? For many reasons.
First, America is a country rich enough and decent enough to provide health coverage to all of its people. We are each diminished when children suffer needlessly and die prematurely because their parents cannot afford the health care they need. That is why a more enlightened society would provide Medicare coverage at birth, not at age 65.
Second, the same political forces fighting SCHIP also seek to dismantle the national treasure that is Medicare. These forces rely on the same worn and false ideological arguments to attack both programs: government’s active role in health care is a threat to, well, something. Depending on the day, that threat can be to the American way, economic growth, freedom, national security or quality health care. These ideologues argue that private insurers, unfettered by nettlesome government regulation, can do the job better and more cost-efficiently.
But that argument does not stand up to the facts. It’s not easy to get most private insurers interested in signing up the very sick, the very poor or the elderly. Is it any surprise that the only way to get private health plans to continue to contract with Medicare is to give them as much as 19 percent more to provide coverage for patients than it costs under the government-administered Medicare program? This giveaway to private interests undermines the entire Medicare program by draining national resources from what is most needed: ensuring Medicare continues to provide good, affordable health care for all its members long into the future.
The Bush administration claims Medicare private plans are paid more because they offer more. When pressed for documentation, Medicare officials told a congressional committee in March that they don’t have records of whether members in private plans actually receive promised benefits. They are still collecting what’s called utilization data, but that doesn’t stop them from insisting that the private sector offers a better deal.
In many cases, people who call the Medicare Rights Center for help found they have to pay more and get less coverage once they sign up for a private Medicare plan. Why would anyone join such plans? Some do so because they can get enhanced benefit packages that work for them. But too many sign up because they are not told what they’re getting into. In June, Medicare officials announced that they have required seven of the nation’s big insurance companies to “voluntarily” stop marketing private-fee-for-service Medicare plans because the companies had misled people into signing up.
The private plans get a monthly fee from Medicare for each member enrolled regardless of how much care that individual receives. The extra payments to private Medicare plans cost taxpayers an extra $1,000 a year to subsidize each member—about $65 billion over the next five years. The extra payments help fund marketing campaigns, cut-rate premiums and benefit packages designed to persuade people with Medicare—especially the low-cost, healthier and more profitable individuals—to sign up.
There’s a better way to spend that money. Congress will be considering cutting these overpayments in the weeks ahead and redirecting the funds to expand SCHIP, to avoid steep cuts in payments to doctors serving patients with Medicare, or expand eligibility to low-income assistance programs for people with Medicare (Medicare Savings Programs).
Those options are worthy alternatives to overpaying insurance companies that are unwilling or unable to provide a dollar’s worth of health care for each dollar paid to them by the U.S. government.
Tell your senators and representative to stop the overpayments to private plans.
Read stories submitted to the Medicare Private Health Plan Project.
Medical Record
“Private Medicare plans in California received $1 billion in overpayments in 2005. Eliminating these overpayments could save more than $50 billion over five years, which could be redirected to help expand coverage for millions of uninsured children when Congress reauthorizes the State Children’s Health Insurance Program (SCHIP)” (“Cutting Overpayments to Private Medicare Plans Can Help Fund Childrens Health Coverage,” California Budget Project, July 2007).
“Among [Medicare] private fee-for-service plans, the type of Medicare Advantage plan that receives the most overpayments, MedPAC [Medicare Payment Advisory Commission] has found that half of the revenue goes to profits—which are very substantial, as a recent Wall Street Journal article documented—as well as to marketing and administrative costs (which are much higher than under regular Medicare), rather than to additional benefits” (“Curbing Medicare Overpayments to Private Insurers Could Benefit Minorities and Help Expand Childrens Health Coverage,” Center on Budget and Policy Priorities, May 14, 2007).
“Despite the high [Medicare Advantage] payments, relative to fee-for-service [Original Medicare] costs, that MA plans receive from Medicare to enrich enrollee benefits, these plans may not always be a good deal for sicker beneficiaries who use more health services” (“Medicare Beneficiary Out-of-Pocket Costs: Are Medicare Advantage Plans a Better Deal?” Commonwealth Fund, May 19, 2006).
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***** 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.
*****
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