Former Kansas congressman/physician doesn't mince words re: Medicare Advantage

This former Kansas congressman and retired physician doesn't mince words....he cuts right to the chase!

~ John Curry

"Government willingness to act as premium-collector for private insurance companies — who then do as they see fit with Medicaid and Medicare enrollees and health care providers —explains in part why we pay about 1 1/2 times as much for health care as anyone else in the world but don't get more for it."

~ Bill Roy

The Topeka Capitol-Journal, August 4, 2007

Roy: Government is go-between for health profiteers

When I wrote last week supporting renewal and expansion of the State Children Health Insurance Program, I had no idea how determined President Bush and many congressional Republicans are to stop subsidized health care for poor children and to privatize Medicare, the highly successful 40-year program that helps seniors and the disabled get medical services.

But I learned when the Republican-sponsored megaphones opened up. For example, the Wall Street Journal op-ed and editorial pages published five articles in six days warning Americans against expanding "government medicine" and/or "Hillary care" by helping states insure kids and shouting the praises of Medicare Advantage, a taxpayer-subsidized program to lure Medicare recipients into private insurance programs.

The propagandists suffered a temporary setback when health insurance company Humana announced 19 percent quarterly income gains, mostly from its growing Medicare Advantage program.

Today's Medicare Advantage was passed in 2003 as part of Medicare Part D legislation that helps some seniors — and many pharmaceutical and health insurance companies — with expensive American drugs.

Explaining how insidious Medicare Advantage is requires some figures.

We Americans pay an annual average of $7,100 each for health care, a total of $2.2 trillion, nearly one-sixth of the gross national product. Yes, that's right, a family of four is paying an average of $28,000 each year for health care.

A part of this large pie is Medicare, which costs more per person because it covers 44 million seniors and the permanently and totally disabled, about one in seven Americans. In 2006, Medicare cost $374 billion, 12 percent of the federal budget. In addition, Medicare recipients pay several thousand dollars out of pocket each year for physician insurance, supplementary insurance, deductibles and co-pays.

Per-person cost of Medicare's decades-old, traditional fee-for-service program varies across the country. As an example, the cost in Region A is $8,000 per recipient. Medicare Advantage pays insurance companies in this region $9,000, a 12 percent (unconscionable) subsidy intended to be used to seduce Medicare patients into becoming wards of private insurance companies.

The insurance companies place their new profit centers into company-structured HMOs, PPOs or fee-for-service arrangements. They also selectively market, avoiding sick people and finding younger and healthier enrollees. Some companies are being investigated for aggressive marketing and misleading advertising that have resulted in confused purchasers who have to pay bills they never expected.

But, with 12-percent subsidies and time-tested tactics, it is no surprise Humana is reporting great profits. With the subsidies, insurance companies can ignore administrative costs and profits that average 15 percent.

(If companies lose subsidies, they'll cut benefits to pay administrative costs and profits. By that time, it will be too late for enrollees — but not for the retired multimillionaire executives.)

If you are just now becoming aware that Republicans intend to privatize Medicare, let me tell you that while we slept they have successfully privatized 70 percent of Medicaid, the other similarly sized government health program.

Medicaid is a state-federal program for the poor that cost $304 billion and covered 47 million people in 2006. States determine eligibility and administer programs — at least until they turn enrollees over to private insurance companies. (SCHIP builds on state Medicaid programs by adding previously ineligible children.)

What we think of as government programs (add the Veterans Administration) pay for some health care for about one in three Americans, or 100 million people. Add 155 million with employer-based health insurance or individual private insurance, and 45 million with no health insurance, and you have us all, slightly more than 300 million.

But federal and state governments are making suckers of taxpayers by turning their 100 million designated beneficiaries over to private insurance companies that take a 10 percent to 30 percent administrative-profit slice (versus 1.5 percent traditional Medicare administrative costs).

Government willingness to act as premium-collector for private insurance companies — who then do as they see fit with Medicaid and Medicare enrollees and health care providers — explains in part why we pay about 1 1/2 times as much for health care as anyone else in the world but don't get more for it.

Dr. Bill Roy is a retired physician and former member of Congress. He has a law degree and lives in Topeka. He may be reached at wirroy@aol.com.