Asclepios
Get Asclepios free by e-mail every week! Click here to subscribe.
Cost-Effective Health Care
July 23, 2007 • Volume 7, Issue 28A review of the annual reports filed by the largest private Medicare plans shows that, for every five dollars they receive in premiums, one dollar goes to administrative overhead, marketing expenses and profit. Original Medicare, on the other hand, spends only 3 percent of the money it receives from taxpayers and Part B premiums on administrative overhead. Put another way, Original Medicare spends 97 percent of its budget on medical care; private plans spend roughly 80 percent.
That helps explain why it costs taxpayers an extra $1,000 for every person with Medicare who enrolls in a private Medicare Advantage plan. But it doesn’t explain why the Bush administration, which claims to be worried about the financial health of the Medicare program, objects to any efforts by Congress to eliminate, or even reduce, the overpayments private Medicare plans receive.
Here’s another head-scratcher. The same administration that wants to keep overpaying private Medicare plans (five-year price tag: $65 billion) has threatened to veto a Senate bill that spends roughly half that amount ($35 billion) to insure some of the nine million children who now lack health insurance. His alternative for them? Go to the emergency room, the most expensive, least efficient way to receive care.
To recap: The administration wants to spend an extra $65 billion to put people in private Medicare plans, when they can get coverage for less in Original Medicare. But it refuses to spend $35 billion to insure children from low-income working families who cannot get health insurance from their jobs.
President Bush claims he is protecting the American people from a Democratic plot to have the government take over health insurance for everybody.
The truth is, the president isn’t protecting the American people. He’s protecting his pals in the insurance industry. The administration wants to keep shoveling money to the private Medicare plans because it wants them to run the Medicare program. And if Congress doesn’t stop the overpayments, these plans will wind up running it. Private plans will transform Medicare from an efficient program that guarantees its members a core set of reliable benefits, to a voucher program that challenges its members to find a private plan they can afford that will also provide the benefits they need when they need them most.
With an extra $1,000, private plans can buy their members a gym pass, a dental cleaning and a pair of eyeglasses—benefits that attract the healthiest, least costly members—and still have plenty left over for their shareholders. With each new member enrolled in a private plan, Medicare moves one step closer to privatization.
That’s the real plot. It’s time for Congress to throw a wrench in the works.
Please join the national call-in day to stop the privatization of Medicare on Monday, July 23. Call your congressional representatives today (toll free at 1-800-828-0498) and urge them to stop the overpayments to private Medicare plans.
Medical Record
“The Democrats’ proposal is part of a larger strategy. . . Their goal is to take incremental steps down the path to government-run health care for every American. It’s the wrong path for our nation” (“President Bush Discusses Health Care,” The White House, June 27, 2007).
“I regret that you seem to object to more children getting help from a government-sponsored Children’s Health Insurance Program. Those children ‘become dependent on government programs for health insurance coverage,’ in your words, because the existing system has failed them. I seek simply to get the most health insurance coverage to the most children” (“Letter from Senate Finance Committee Chairman Max Baucus, Democrat of Montana, to Michael Leavitt, Secretary of Health and Human Services,” July 17, 2007).
“CBO [Congressional Budget Office] projects that, under current law, payments to Medicare Advantage plans for benefits under [Medicare] Parts A and B will rise from $60 billion in 2006 to $196 billion in 2017—reflecting an annual average growth rate of 11 percent . . . Much of that increase (about 7 percent per year) will result from growing enrollment; the rest (about 4 percent per year), from increasing payments per enrollee. By comparison, CBO estimates that total enrollment in Medicare will grow much more slowly and that total spending will increase by an average of 6.5 percent per year. Spending for Medicare Advantage is projected to total approximately $1.5 trillion from 2007 through 2017, more than a quarter of all spending for benefits under Parts A and B” (“Medicare Advantage: Private Health Plans in Medicare,” Congressional Budget Office, June 28, 2007).
*****
Medicare Part D Appeals Help for Advocates is here! MRC’s new “Medicare Part D Appeals: An advocate’s manual to navigating the Medicare private drug plan appeals process” offers an easy-to-understand, comprehensive overview of the entire appeals process, including real-life case examples, a glossary of important appeals terms, a sample protocol for advocates, and links to important resources.
Register for a FREE copy of this great resource.
***** 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.
Please send all replies and subscription requests to mrcadvocacyupdate@medicarerights.org.
Get Asclepios free by e-mail every week! Click here to subscribe.