The annual fall Medicare Advantage media blitz is in full swing. Private insurance companies are raking in billions of dollars on the backs of unwitting seniors who think they are getting a good deal but in fact are being robbed of not only benefits but money.
Here’s the quick rundown. In 2003 it was decided that the private insurance industry should share in the profits of the government’s Medicare program. It was a calculated political move to privatize Medicare and eventually turn it into an entirely private insurance product.
Keep in mind that Medicare’s administrative expenses run at about 2 percent while private insurance company administrative costs run as high as 20 percent or more.
If you want a good example of meaningless political activity and wishful thinking look to the current announcement that there will be negotiations for price cuts for 10 drugs in the Medicare drug program. People need to be reminded that Medicare D, the drug program created many years ago, was a gift to the pharmaceutical industry and did little to help seniors struggling to pay for medication. It has increased the profits of drug companies and that is no accident.
The Inflation Reduction Act (IRA) of 2022 mandated that the federal government negotiate with the pharmaceutical industry and now the Biden administration is trying to get PR mileage because they are going to “try” to negotiate to lower prices for 10 drugs commonly prescribed for seniors. I say try because big pharma is already lining up all of their legal teams to fight the negotiation process. It will be hard for the drug company CEO’s to buy another vacation home if profits are not maximized.
Americans who rely on Medicare for comprehensive health insurance are being assaulted by the forces of the American insurance industry. It’s nothing new. In 2003 the Medicare program was revamped and a new product, Medicare Advantage (MA), was created.
MA was created to privatize the Medicare insurance program and it is succeeding. People are lured in by low premiums and add-ons such as gym memberships and other lifestyle benefits. But MA is not the kind of insurance you want when you get sick. It works a lot like a managed care plan, meaning it is not portable from state to state and a lot of claims end up being denied that would have been easily accepted by traditional Medicare (TA).
A reasonable person might think that if a disease affects the lives of 38 million Americans, or 11 percent of the population, that measures would be in place to make life a little more bearable for them. Don’t hold your breath. Diabetes is a difficult disease to manage under the best of circumstances, but when people with the disease don’t have enough political power their needs take a back seat to the profits of the pharmaceutical industry.
This is not a revelation. What I am mostly talking about is the obscenely high price of insulin. People with Type I diabetes require daily insulin and they make up five to ten percent of all diabetics. About 30% of type 2 diabetics require insulin.
About eight million Americans rely on insulin to stay alive. Not a critical mass for politicians to get worked up enough, especially when you consider that lower income people and people of color represent a higher number of insulin-dependent diabetics.
It may be a case where we should be thankful that there is at least a recognition that the mouth needs insurance coverage as much as the rest of the body. According to a recent article in Health Affairs, “Medicare Parts A and B will begin coverage of dental treatment to eliminate oral infection prior to solid organ transplant and select cardiac procedures in 2023, and prior to head and neck cancer treatment in 2024. CMS will also generate an annual review process for coverage of other medically necessary dental treatment.”
This is extremely narrow coverage that will not affect a lot of people but it is a start. In 2019 and 2021 the U.S. House passed a Medicare dental benefit bill but the U.S. Senate did not adopt it. The Build Back Better Act originally included Medicare dental coverage but that was removed because of lobbying by the American Dental Association.
Seniors continue to flock to enroll in Medicare Advantage plans. Most don’t know that they are helping to convert the program into just another private insurance plan. The insurance companies have been able to lure people in with low cost or no premiums and enticements that seem to good to be true.
There is a reason that the insurance industry advertising blitz has been so pervasive and relentless this year. Insurance companies are reaping higher profits from Medicare Advantage and, even though there is a high level of fraud and abuse, the companies committing these crimes simply pay fines and make it part of “just doing business”.
The Physicians for a National Health Program (PNHP) has been one of the few activist organizations working hard to educate the public about the threat to Medicare and to provide factual information about what is going on. They have launched a new effort to get the word out and I am extracting some of the more important points.
It’s bad enough that we are being subjected to a barrage of political ads as the mid-term election approaches. Those of us in the Medicare eligibility pool are also experiencing the yearly lust to enroll by private insurance companies hoping you will switch to a Medicare Advantage plan. Medicare pays them extremely well when people sign up for Advantage plans.
My simple advice is that if you are enrolled in traditional Medicare stay there. Consider switching back to traditional Medicare if you are in an Advantage plan. From October 15 until January 15, 2023 Medicare beneficiaries can switch Medicare plans.
Understanding all of the implications of types of Medicare plans can be difficult. If you look at some of the most important issues, such as cost, then decisions can be easier. Medicare Part A has no cost for most people. In 2023 the standard monthly premium for Medicare Part B will be $164.90 and the annual deductible will be $226.
The February 19 edition of the Vermont Business Magazine carried a piece written by Dawn Schneiderman, Vice President and Chief Operating Officer for Blue Cross and Blue Shield of Vermont, claiming that if Vermonters are allowed to enroll in Medicare supplemental plans after their initial six month eligibility period costs will rise for everyone else. She does a poor job of defending her position.
To make this issue real look at the current cost of a Vermont Medigap Blue Plan G policy for someone initially enrolling during the initial six month window. It will cost that person $152.33 a month. If that person wants to enroll in that same plan after the six month window it will cost them $268.91 for the same coverage under Vermont Blue 65 Plan G.
A few months ago I talked about a threat to the traditional Medicare program beyond the threat that Medicare Advantage poses to the public nature of the program. That threat is called Direct Contracting Entities (DCEs).
The Trump administration initiated the DCE change to push Medicare in the direction of privatization. That kind of move is going to chip away at the equality and near-universal access that Medicare offers because private insurance companies will be more in control of how health care is delivered and paid for.
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.
Every year during Medicare’s open enrollment period, which is from October 15 to December 7 this year, millions of Medicare beneficiaries are bombarded by private insurance companies looking for their business. The advertising makes it sound like these benevolent companies are looking to offer you a pot of gold for free. If it sounds too good to be true then it is too good to be true.
Here’s the story. In 1997 congress authorized the creation of Medicare C which has come to be known as Medicare Advantage. It was an effort by Republicans to privatize Medicare and make it less of a government-run program. It was also a gift for the private insurance industry which continues to haul in huge profits when people switch from traditional Medicare A to Medicare C.
Three years ago Vermont started an experiment to try to improve the quality of health care and to lower costs. A for-profit entity called One Care was created and, from the start, the organization’s complexity and lack of transparency has been an issue.
Those problems surfaced in a recent public hearing before the Green Mountain Care Board, the entity that has regulatory control over One Care. One Care is proposing a budget of $1.43 billion. Those funds come from insurers such as Medicare and Medicaid and private insurers and are then funneled directly to hospitals and providers.
Anyone who is 65 years or older is most likely receiving notices about changing their Medicare plan by postal mail, e-mail or through a variety of other media. Medicare open enrollment period is from October 15 to December 7 and anyone enrolled in either traditional Medicare or a Medicare Advantage plan can switch coverage. New coverage would begin on January 1, 2020.
It is important to understand the history of the Medicare Advantage program. In 2003 President Bush signed into law changes to the Medicare program that included the creation of Part D Medicare which turned out to be a financial bonus for American pharmaceutical manufacturers.
Join us at Brooks Memorial Library on Wednesday, October 17th at 7pm for the educational workshop, “Managing Health Care Expenses in Retirement: What Baby Boomers Need to Know About Medicare and Long-Term Care.”
A health care crisis is looming in this country, and it is essential for baby boomers to understand what they need to do to prepare for it financially.