A popular U.S. newspaper (USA Today) gives its opinion of the "Medicare advantage" that isn't!
From John Curry, September 30, 2009
...this editorial comes from a "conservative" newspaper - USA Today. USA Today is #1 in daily circulation rates at over 2 million copies per day. Now, maybe the public will wake up to the giant rip-off that Medicare advantage programs really are!
John
"We asked both Humana and the industry's trade organization, America's Health Insurance Plans,, to defend this system in an opposing view. They declined."
(Imagine that! I wonder why?)
John
USA Today, September 29, 2009
USA TODAY editorial
USA TODAY editorial
Our view on paying for health reform (Part II): How Medicare Advantage turned into a boondoggle Private medical insurers couldn’t compete, so now they get a subsidy.
The private form of Medicare known as Medicare Advantage is enormously popular with seniors, and no wonder. Private Medicare plans offer extras such as vision care, dental benefits and even health club memberships that may cost more or not be available at all in the traditional fee-for-service Medicare that most seniors use.
The private form of Medicare known as Medicare Advantage is enormously popular with seniors, and no wonder. Private Medicare plans offer extras such as vision care, dental benefits and even health club memberships that may cost more or not be available at all in the traditional fee-for-service Medicare that most seniors use.
It's hardly surprising that almost a quarter of Medicare's 45 million beneficiaries have signed up. It's a sweet deal, underwritten by working Americans who subsidize those gold-plated private plans. Taxpayers help pay an additional $1,138 per beneficiary every year above the cost of fee-for-service Medicare to give Medicare Advantage beneficiaries all those extras. Even Medicare beneficiaries themselves kick in — they pay about $43 a year in additional premiums to help subsidize Medicare Advantage members.
It gets worse. The inflated costs of Medicare Advantage are hastening the bankruptcy of the overall Medicare system by an estimated year and a half. Worst of all: Private Medicare was originally sold as a way to use the efficiency of private business to provide better service and add benefits more cheaply than the government could. Some Medicare HMOs do that, but many private plans don't. Overall, private Medicare plans cost an indefensible 14% more than traditional Medicare.
Bottom line? Like it or not — and at the outset we were optimists about Advantage — its promise has failed. Far from improving Medicare, it has turned into a wasteful taxpayer handout to uncompetitive insurers. Enjoying the largesse are companies such as Humana, for which Medicare Advantage is a profitable and growing enterprise. We asked both Humana and the industry's trade organization, America's Health Insurance Plans, to defend this system in an opposing view. They declined.
If there's anything in the medical system that's ripe for cutbacks, it's the wasteful subsidies in Medicare Advantage, which is projected to spend some $1.6 trillion over the next 10 years. A subsidy phase-down being considered in the Senate would save about $113 billion. That tiny fraction of the total would pay more than 10% of the cost of health reform.
If there's anything in the medical system that's ripe for cutbacks, it's the wasteful subsidies in Medicare Advantage, which is projected to spend some $1.6 trillion over the next 10 years. A subsidy phase-down being considered in the Senate would save about $113 billion. That tiny fraction of the total would pay more than 10% of the cost of health reform.
But the iron rule of government benefits is that once they're handed out, they're difficult or impossible to take away, no matter how wasteful or unjustified they are. That's what's happening here. Seniors, stirred up by Republicans who want to block health reform and by insurance companies intent on keeping their subsidies, are complaining bitterly about losing benefits.
President Obama didn't help by promising that people who like their health coverage can keep it. That's not the case for Medicare Advantage, where Obama favors trimming subsidies. While the most efficient plans would survive, some uncompetitive plans would go out of business, and others would have to drop benefits or charge more.
And that's as it should be. Seniors deserve to have options, but with Medicare going broke, those who want extras should bear the cost themselves. Cutting wasteful subsidies is exactly the right way to help pay for overhauling the health care system. If private companies can out-compete government-run health care, let them do it — without taxpayer handouts.
This is the second of two editorials on leading proposals to finance health care reform. Read the first one at blogs.usatoday.com/oped.
posted by Kathie Bracy at 8:35 PM
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