Posts tagged 'medicare advantage'
The Obama administation has taken an important first step toward reducing what are basically a set of handouts to private insurers, embedded in the Medicare system. These government subsidies to private industry enrich insurance companies at the expense of taxpayers and beneficiaries. The particular handouts in question come in the form of subsidies to so-called Medicare Advantage plans. As the Wall Street Journal reported on Monday:
The federal government made good on its plan to cut 2010 payments for private Medicare plans, diminishing the subsidies to health insurers sooner than the industry originally expected.
The cuts, announced late Monday by the Centers for Medicare and Medicaid Services (CMS), are slightly less severe than the 5% reduction the federal agency signaled in February, but still raise concerns about what has been a critical source of profit growth for many health insurers. Reimbursements to private insurers that administer so-called Medicare Advantage plans would fall by as much as 4% to 4.5% next year.
There have been numerous acknowledgements that the Bush Admiistration pushed for private insurance companies to become more and more involved and imbeded in the system and it is beyond time that everyone has had enough.
Here is th description of the genesis of Medicare Advantage plans in more detail in a post back in January on a blog called Unsilent Generation:
Medicare Advantage (MA) plans–-which offer managed care run through private insurers, paid for by the federal government–-are the point of the stake that conservatives have long been trying to drive into the heart of traditional Medicare (which, for all its shortcomings, is the closest thing to a single-payer program that this country has ever seen). Columnist Saul Friedman recently wrote about the history of of this effort, recalling a 1995 press briefing in which Dick Armey, Newt Gingrich’s collaborator on the “Contract With America,” announced their intent to “wean our old people away from Medicare.” The first step was to introduce private Medicare HMOs–-what later evolved into Medicare Advantage plans, with a big boost from the Republicans’ 2003 Medicare bill.
MA plans have come under increasing fire for their hard-sell tactics to elderly Medicare recipients, shoddy coverage, and rip-offs of the public purse. “Competition” from the private plans was supposed to reduce growth in Medicare spending–but in fact, they cost the government more. A September 2008 report from the Commonwealth Fund calculated that “payments to MA plans in 2008 will be 12.4 percent greater than the corresponding costs in traditional Medicare–-an average increase of $986 per MA plan enrollee, for a total of more than $8.5 billion. Over the five-year period 2004-2008, extra payments to MA plans are estimated to have totaled nearly $33 billion.”
If the Commonwealth Fund’s figures hold true for this year as well, then by my calculations the Medicare Advantage plans are still getting a subsidy of some 8 percent over traditional Medicare, even after a 4 percent cut. (In fact, the baseline payments to private plans will still go up slightly in 2010, but they’ll be offset by adjustments in other areas—so the 4 percent is just an estimate.) Nonetheless, the insurance companies are already whining about (and lobbying against) the cuts, claiming that they will harm the 10 million Medicare beneficiaries who’ve been convinced to switch to private plans. According to Reuters:
Analysts say the new rates will force insurers to cut benefits for elderly and disabled patients enrolled in Medicare Advantage plans or increase premiums in order to maintain profit margins.
That last phrase, of course, is key: It’s the profit margin that matters to these companies, which is why they shouldn’t be in the Medicare business in the first place—especially if they require extra government subsidies just to make enough money to satisfy their greed. The insurers know that in order to maintain their high profits, they’ll now be “forced” to cut the benefits on their private plans, and more and more Medicare patients will just switch back to conventional, government-run Medicare.
That can’t happen soon enough. The government’s next step should be to boot the insurance companies out of the Medicare Part D prescription drug program, which would likewise save the taxpayers a bundle while improving benefits to the old and disabled. I’d love to see this done before I fall into the coverage gap, which usually happens around August. But to accomplish this change, Congress will need to act—and they’ll have to battle Big Pharma as well as the insurance giants. So I’m not holding my breath.
quotes and other information courtesy of Mother Jones
President Obama's budget chief has made it clear to health insurance executives that the fun is over and it’s time to get serious.
On Tuesday, White House Budget Director Peter Orszag said the government will no longer overpay companies that offer Medicare Advantage plans, the privately run portion of the government health program for seniors.
Companies like Humana Inc. and UnitedHealth have been defending their plans for over a decade, pointing out that in their opinion, they offer lower premiums and extra benefits compared with government-run Medicare. More than 10 million of the 44 million seniors enrolled in Medicare are signed up for Medicare Advantage.
The problem is that industry executives have long known that the government spends significantly more money on Medicare Advantage than its own plan. When private insurers first entered the Medicare program in the late 1990s, many lawmakers assumed companies would lower costs with their managed-care strategies. Instead, over a decade has passed and the government is spending about $1.30 per Medicare Advantage patient versus $1.00 per patients who are enrolled in traditional Medicare. The cost burden falls on taxpayers as well as patients in regular Medicare, who pay higher premiums.
"I believe in competition. I don't believe in paying $1.30 to get a dollar," Orszag told conference attendees, including representatives from Aetna Inc., WellPoint Inc. and Cigna Corp.
Orszag's address came less than a week after President Obama kicked off his health reform effort with a massive summit at the White House. Orszag showed little intention of compromising on the Medicare Advantage issue.
Under President Obama's recent budget proposal, Medicare Advantage companies would have to compete to offer their services in different parts of the country. The government payment for each region would be based on the average bid submitted by companies, saving $177 billion over 10 years, according to the White House. Under the existing system, payments are calculated annually using a preset formula.
Orszag reiterated Tuesday that the best chance to solve the country's current health care predicament is to eliminate billions of dollars worth of wasteful spending. He pointed out that different regions of the country spend vastly different sums on seniors in Medicare, without showing much difference in health outcomes.
Insurers are not the only group being asked to change how they do business. As part of his economic stimulus package, Obama provided $1.1 billion in funding for research comparing the effectiveness of various medical treatments. By rewarding physicians for using the most efficient practices, the administration hopes to reduce health care costs.
"We are pushing hard on changing incentives for providers so that we are rewarding better care and not more care," Orszag said.
Some quotes from The Associated Press.
During the past few years, Medicare Advantage has become a more integral part of seniors’ health planning. Using basic Medicare and adding Medicare Advantage has been helpful to many Medicare beneficiaries including giving them some perks, such as gym memberships which could otherwise cost thousands of dollars. The added benefit to both seniors and Medicare is that the extras, such as gym membership encourages healthy living and can help prevent illness.
It is important that individuals who are thinking of enrolling in Medicare Advantage compare rates and coverage carefully. Since Medicare Advantage is private insurance and is not offered through Medicare, there can be issues that arise. Instead of paying your claims directly, the government pays private companies to do this through the Medicare Advantage plans.
Over 10 million seniors are enrolled in Medicare Advantage. Experts advise that especially during these difficult financial times seniors should look beyond some of the perks offered and compare private coverage to their traditional Medicare coverage.
There are various problems that seniors run into when they have left traditional Medicare for private coverage. One of the most common problems is that many physicians don’t accept Medicare Advantage; therefore many seniors are finding that they are in a position where they have to change doctors. For many, this can be traumatic for many reasons. Finding a new doctor who doesn’t know you (and who you don’t know) can be quite an ordeal. It has taken some people several months to either find a new doctor or go back to their old Medicare plan. Some individuals have had to go without medication during that period of time.
Many individuals are happy with Medicare Advantage. It is important, however, to determine what the plusses and minuses would be for you. Just because the agent tells you that you can continue with your old doctor, does not mean that it will be possible for your doctor to continue seeing you. Also, some individuals are finding that some medications and other out of pocket expenses are not covered as well as they were by their old Medicare policy, therefore costing them more money.
Before you change your coverage make sure you research to determine what will happen to your benefits in advance.
There is a lot of confusion regarding the difference between “original” Medicare and Medicare Advantage. This article will discuss the basic differences to help you understand what coverage is available and which plans are appropriate for you.
Medicare is made up of two basic categories Medicare (Original Plan) and Medicare Advantage Plan. Both plans have supplemental categories including Part A, B, C, and D.
The original plan includes Part A. You an add part B and D if you choose to. You will automatically be enrolled in original Medicare when you turn 65, unless you decide to choose Medicare Advantage (Part C). The Original Medicare Plan is managed by the federal government as a fee-for service plan with various options and co-pays.
The Medicare Advantage plan combines Part A and Part B and is provided by and managed by private insurance companies. If Part D coverage, which covers prescription drugs, is not included with the plan you purchase, you can purchase it as a separate supplement.
If you choose to Medicare Advantage plans, there are several types of coverage, including HMO, PPO, plans that include private fee-for-service, and Medicare special needs plans.
Part A covers hospital expenses and does not charge a premium. It also covers inpatient care in skilled nursing facilities, critical care hospitals, regular hospitals, hospice services and hoe health care services.
Part B pays for medically necessary services and supplies covered by Medicare. There is a premium for this coverage for most people. Part B covers outpatient, doctors, physical and occupational therapists and additional home health care.
Part C I the Medicare Advantage Plan which covers Part A and B. Though it is provided by private insurance companies, it is still overseen and approved by Medicare. With this program you may have lower costs and usually receive extra services.
Part D is prescription coverage which is a stand-alone plan. Most people pay a premium for this coverage and all medically necessary drugs are covered. There are different plans that cover different drugs. It is important to compare plans to be sure what coverage is best for you.
To be certain that you have the correct coverage, it is best to contact Medicare at 1-800-MEDICARE r visit them on the web at www.medicare.gov.
Private Fee-For-Service Plans are Medicare Supplemental Plans that are offered by private insurance companies as part of Medicare Advantage. There are some policies that are excellent and offer good coverage but not all of them offer what individuals need. Though many plans sound great, it is essential that Medicare recipients thoroughly research any plans that they are thinking about purchasing.
The way that Private Fee-For-Service (PFFS) plans work is that Medicare pays insurance companies for coverage for Medicare recipients. The Medicare recipient can then go to any Medicare-approved provider who will accept the plan’s payment. The important difference between PFFS and original Medicare is that there is no limit to the co-payments, nor is there a limit to the premiums that can be charged. This is an area that it is very important to look closely at, because this means that the Medicare recipient in this situation will have to share a portion of the costs involved and this can add up. Medicare allows providers to charge up to 15% above the plan’s payment amount for services.
The Medicare Rights Center has reported that even though the plans seem like they have some advantages, there are often more disadvantages with Medicare Advantage than the older, original basic Medicare. Care can be more expensive due to higher co-payments, and many doctors and health care centers that accept basic Medicare as payment will not accept Medicare Advantage.
Another issue is that Medicare Advantage has been looked at very closely because of aggressive – and sometimes fraudulent – marketing and sales practices. Many Medicare recipients are being pressured and tricked into changing coverage, and, as a result, have been put in a situation where they are not better off at all. In fact, in many cases, they are receiving a plan that does not cover them as well as the coverage they are replacing.
If you are thinking of enrolling in a PFFS plan, it is important to do some research to be sure it is legitimate and advantageous. One of the best ways to protect yourself is to look at the cost of co-pays, premiums and extra coverage and make sure you can afford them. Also, be sure you are comfortable with the individual and company you are buying from, and don’t hesitate to check them out.
To be certain that you are purchasing what you truly need, contact Medicare at www.medicare.gov, www.cms.gov , or call them at 1-800-MEDICARE to talk to trained individuals who will answer your questions and help you to look carefully and understand the coverage you have now and the coverage that is proposed.
