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Make Time for Medicare
November 8, 2007 • Volume 7, Issue 44As we approach the end of this legislative session, it is looking increasingly likely that the Senate will not get around to passing some long overdue Medicare improvements that passed the House back in August. First, there is the Thanksgiving break, followed shortly by the Christmas recess, and so, the insiders say, there’s just not enough time.
That’s a shame.
Here’s what will happen if the Senate fails to act:
- Taxpayers will keep paying more for private Medicare health plans than they would to cover the same people under Original Medicare.
- State insurance commissioners will remain unable to stop private Medicare plans from engaging in predatory, deceptive and fraudulent marketing.
- Private Medicare health plans will continue to lure consumers with low premiums only to stick them with high bills for hospital care and chemotherapy.
- Medicare will continue to discriminate against people with mental illness by paying less (50 percent) for mental health treatment than it does for treatment of physical ailments (80 percent).
- Low-income people with Medicare will continue to be denied coverage through the doughnut hole—the coverage gap in the Part D prescription drug benefit—because they have a modest nest egg saved for their retirement.
It is the first item—the $8 billion plus a year in extra payments to HMOs and other insurance companies that contract with Medicare—that is the real obstacle to enacting these important improvements. Insurance companies are determined to protect those overpayments because they fatten company profits. The insurers have a number of senators, both Democrats and Republicans, who are going to bat for them and preventing legislation that would reduce—not even eliminate—the excess payments and use the savings to fund the other important Medicare improvements.
Medical Record
“‘Medicare Advantage plans generate annual gross margins of about $1,650 per Humana beneficiary, more than 10 times the profit from drug plans,’ said Carl McDonald, an analyst with CIBC World Markets in New York. Gross margin is revenue minus the cost of goods or services. In the third quarter, Humana's ratio of medical expenses to premiums from Medicare health plans decreased to 81.3 percent from 84.1 percent a year earlier, helped by the $69 million one-time gain” (“Humana Shares Fall as UBS Challenges 2008 Forecast,” Bloomberg News, October 29, 2007).
“We believe that the Senate should improve the integrity and viability of the Medicare program by equalizing payments between private Medicare Advantage plans and traditional Medicare. Adopting the Medicare Payment Advisory Commission (MedPAC) recommendation of financial neutrality would save billions of taxpayer dollars, improve the solvency of the hospital insurance Trust Fund, and reduce Part B premiums for all beneficiaries. Furthermore, the savings achieved from reducing such private insurance overpayments could be used to enact necessary Medicare beneficiary enhancements” (Letter to the Senate, Leadership Council of Aging Organizations, October 24, 2007).
“I am a social worker in a public housing complex for low-income seniors over 65 years old. These [Medicare Advantage] plans are taking advantage of our most vulnerable people to make a profit. Residents come to me upset and confused about Medicare and Medicaid versus HMOs. They want and need to save every penny, living on $500 a month or less. They are called, sent mail and harangued by representatives selling these HMOs, saying they offer more at a cheaper cost. What they do not say is that the doctors residents can see are restricted, the procedures they can undergo are restricted and the hospitals where they can receive care are far away. Some of these residents are hard of hearing, some cannot see, their access to transportation is limited, and their physical ability to travel even more than 20 minutes is limited” (Story submitted to the Part D Monitoring Project, Medicare Rights Center, May 18, 2007).
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Submit your story at http://www.medicarerights.org/partdstories.html.
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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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