When Congress says it’s OK to waste health care dollars
Evidence continues to pile up that Medicare Advantage plans are no advantage for taxpayers. MA plans, as they are called, are one alternative for seniors to receive their Medicare benefits. But in this case, the benefits come from government payments to private insurance carriers, not directly from the federal government.
Medicare Advantage plans took off in 2006 when overpayments from the government allowed insurance sellers to offer these arrangements as an alternative to traditional Medicare benefits and Medigap policies.
In a move to encourage beneficiaries to use managed care—on the theory it would save money—the government began to pay insurers to provide the same benefits to seniors and disabled people eligible for Medicare that would be available in the regular fee-for-service program.
Payments from Washington have been very generous—a kind of subsidy for insurers that has made it possible for them to entice seniors with low or no monthly premiums for their coverage and extra goodies like chiropractic care, gym memberships and eye glasses.
There was a catch, though, that seniors would learn about only if they got sick. Some of these no-premium MA plans came with high copayments and coinsurance required for many services.
Still, they’ve become so popular that 30 percent of all Medicare beneficiaries now have them, and most beneficiaries eagerly sign up for them during fall open enrollment with little thought to potentially high out-of-pocket costs down the road.
Studies by health policy researchers in and out of government have found that Medicare has paid insurance companies as much as 12 or 13 percent more than it costs to provide identical benefits for the same services under the traditional program thanks to quirks in the payment formulas as well as overbilling by insurance companies.
The most recent study has come from Medicare’s own researchers who quietly posted their results in late July on an online research site of the Centers for Medicare and Medicaid Services, which runs the Medicare program. They found many MA plans routinely overbill the government for treating elderly patients and have done so for years.
Researchers said that many MA plans exaggerate how sick their patients are and how much they cost to treat them, a practice called upcoding, which my journalistic colleague Fred Schulte at the Center for Public Integrity has written about extensively.
Schulte told me “the study can appear to be an inside baseball thing but it’s hugely important since it exposes tons and tons of misspent taxpayer money.”
Subscribe to our e-Edition to get the full story! Call 970-854-2811.
Holyoke Enterprise Aug. 21, 2014