A NEW THREAT BEYOND MEDICARE ADVANTAGE
By Richard Davis
Seniors are being bombarded with advertising for Medicare Advantage plans because the open enrollment period for Medicare is from October 15 to December 7. Insurance companies make piles of money if people switch from traditional Medicare to an Advantage plan.
The Advantage plans were created to move Medicare into the private marketplace and provide a financial windfall for the insurance companies.
They are good plans if you never get sick because the initial premiums are low and you get a few extra benefits not available in traditional Medicare.
But if you try to use the insurance in an Advantage plan you are subject to network restrictions and out of pocket expenses. It is not uncommon for a plan to have you pay $6000 out of pocket if you need care.
With traditional Medicare you pay about $4000 a year for Part B and a supplemental policy and deductibles and have 100% coverage without any surprises. No network and you can go to whatever provider you want as long as they accept Medicare.
Advantage plans often have no premiums and you only pay for Medicare Part B because the advantage plan includes Medicare supplemental coverage. If you don’t use your advantage insurance it is very cheap.
Here’s one possible Advantage scenario. Let’s say you break a hip or are in a car accident in December. You end up in the hospital and need different kinds of care through January. Because your care is in two different years you could pay up to $12,000 in out of pocket expenses. If your care is earlier in the year it might only be $6000.
With traditional Medicare you have fixed costs and you know you are covered for just about anything that could happen to you anywhere in the U.S. If too many people are lured into Advantage plans we could see Medicare become so privatized that the average American won’t be able to afford Medicare coverage.
And just when you think it can’t get any worse there is a new threat to the traditional Medicare program that is even more ominous than the advantage scheme. It’s called Direct Contracting Entities (DCE’s) and it is so complex that the mainstream media may not be writing about it anytime soon.
A few organizations, such as the Physicians for a National Health Plan (PNHP), are sending out warnings and providing information about DCE’s. In a recent letter they state, “A scheme first proposed by the Trump Administration and now sanctioned by the Biden Administration’s Centers for Medicare and Medicaid Services (CMS), the little-known Global and Professional Direct Contracting (GPDC) model could hand traditional fee-for-service (FFS) Medicare straight to Wall Street investors. How many people are affected? More than 30 million seniors who have chosen traditional Medicare could be involuntarily assigned to a Direct Contracting Entity (DCE) without their knowledge or consent.”
They go on, “DCEs, newly created by CMS, are middlemen that have the tools to manage the care of beneficiaries in traditional Medicare in many of the same ways as commercial Medicare Advantage plans. They could drive up traditional Medicare costs to maximize revenues Could use inflated service codes to assign higher risk scores to patients, thus increasing their own revenues and draining the Medicare Trust Fund . Operate with limited oversight, likely undermining Medicare beneficiaries’ care and driving excess payments to DCEs. Give enrollees the right to switch out of their DCE, but patients may not know that or understand why they should.”
There are now 53 DCE’s operating in 43 states and in D.C. Twenty eight are investor owned. Doctors have to sign up to participate in a DCE and they may be promised up to a 40% increase in Medicare provider reimbursement and lower quality measure standards. When a doctor signs up for a DCE their patients are automatically “aligned” to the DCE without their knowledge or consent. Patients are sent a letter but may not understand the complexity of what is happening to them.
The DCE model needs to be stopped if we are to preserve affordable coverage for Medicare beneficiaries. When government officials and insurance industry powerbrokers are able to hide behind complexity they often win.
Vermonters may be shielded from the DCE penetration because we use an Accountable Care Organization (ACO) model called One Care that may make DCE’s unnecessary. That needs to be clarified.
We need to find ways to fight this battle publicly. I will give you more information as soon as it is available.