Villagers Learned What Is Happening to Medicare & Medicare Advantage
Bill Kadereit, President, National Retiree Legislative Network (NRLN) explained to Villagers on May 23 at the meeting of the NRLN Villages Chapter how Medicare Advantage plans are being used to speed Medicare toward privatization. Below are Talking Points on this issue. Click here to view the slides from the presentation. Click here to read the NRLN whitepaper on this issue.
MEDICARE ADVANTAGE PLANS - SPEEDING TOWARD PRIVATIZATION
$350 BILLION WASTED ON SUBSIDIES TO PRIVATE INSURERS
Talking Points
The Congressional and Executive branches have been on a 35-year flight from budgetary accountability for funding our Medicare program to what they have been convinced is the best solution, privatizing Medicare. This flight reveals that so far over $350 billion of federal taxpayer money has been paid to insurance companies, wasted on subsidization of private insurers for selling Medicare Advantage (MA) plans.
In 2018 Congress amended the "Bi-Partisan Budget Act of 2018" (BPBA), and thus delivered a low blow that confirms our assertion and declares Congresses' and the White House's intentions to privatize Medicare. The BPBA created benefits and the Center for Medicare Services (CMS) authorized MA plans to spend $16.5 billion more in 2019 and 2020 for MA plan benefits available to 34% (20 million) enrolled in MA plans but NOT for 66% (38.8 million) enrolled in traditional Medicare A&B plans. MA enrollees with asthma will get home care but traditional A & B enrollees won't!
Clearly, based on the Congressional Budget Office (CBO) October 5, 2017 analysis, privatization will not lower the cost of health care, instead it will shift 18% of the federal tax burden and health care costs to seniors while protecting the health care provider and pharmaceutical industries.
MedPAC, the independent congressional agency created by Congress to advise them on issues affecting the Medicare program, reported on March 15, 2019..."We project the base benchmarks (that is, excluding quality bonuses) will average 103 percent of traditional Medicare Fee for Service (FFS) spending, and the payments, excluding, quality bonuses (and coding differences), will average 98 percent of FFS spending in 2019." According to MedPAC bonuses would add about 2.4 percent to the 98 percent.
This report said benchmarks without quality bonuses added would average 103 percent in 2019. MA plans are more expensive per enrollee than traditional Medicare.
So, why not fix traditional Medicare, strip out the cost of subsidies? Health and Human Services (HHS) is wasting taxpayer's money and cheating over-age 65 Americans.
FEDERAL SUBSIDIES PAID TO MA PLAN INSURERS ARE UNWARRANTED!
THEY SHOULD BE STRIPPED OUT NOW RATHER THAN LATER WHEN INSURERS WILL BE ABLE TO INCREASE PREMIUMS, DUDUCTIBLES AND COINSURANCE AT WILL IN ORDER TO MAINTAIN THEIR 5% + PROFIT MARGIN!
MA private insurer plans carry a 12-15% overhead and profit burdens and have failed to compete without federal subsidies. Traditional Medicare has a much lower 3% overhead burden. MedPAC reported that MA plan insurers made a 5% margin in 2016, twice the average of Medicare plans overall. That's 25% better than the healthcare industry's 4% margin reported by Standard and Poor's.
The Kaiser Family Foundation (KFF) data from 2017 records indicate that Medicare A & B payments to MA plan enrollees were 9.9% higher than payments made to traditional Medicare (FFS) enrollees. It is time to derail Medicare privatization.
Strip subsidies and then determine if private insurers can offer a better deal or not, on a level playing field. Current data says not! Are they competitive with Medicare FFS or not? If not, dump them and go after FFS cost reduction; take on doctor and hospital costs, Pharma, product manufacturers and others - install an across the board competitive bidding discipline and toughness that has always been needed.
The NRLN Asks Congress and the Executive Branch to:
- Grandfather and protect the 20 million seniors (34%), who have purchased MA plans in good faith, from future reductions in benefits and guarantee the protection of baked in subsidies as of December 31, 2019 and all future MA subsidies, rebates, rewards, bonuses and non-traditional Medicare plan benefits combined.
- Direct Government Accountability Office (GAO), CBO and the HHS Inspector General to investigate and report on MA and Original Medicare Part A and Part B independent financials and assess and publicly disclose the cost effectiveness of MA, with and without taxpayer subsidies (rebates, risk adjustments and star bonuses).
- Retract the 2019 and 2020 subsidies for home air filters and carpet shampooing for asthma patients, pay for heart healthy meals for those with heart disease and other services that represent a shift from services that prevented, improved or cured a patient's conditions, to services determined by what a chronically ill patient needs, or make them available to the original Medicare A & B, FFS enrollees who have the same health conditions and needs.
- Reduce the $140 billion annual wrong and improper payments generated by all federal agencies (particularly the $85 billion attributable to Medicare and Medicaid). Sequester savings and use them to eliminate the 75-year deficits of Medicare Part A and Part B, then Part D. Payroll tax increases are an option.
Click here to read the latest NRLN actions during the last month.
