...and then some wonder why I rail at Medicare Advantage programs!

Those "some" might benefit from reading this report (issued Wednesday)by the Committee on Energy and Commerce

From John Curry, December 10, 2009

http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1851:new-report-highlights-medicare-advantage-insurers-higher-administrative-spending&catid=122:media-advisories&Itemid=55

Wednesday, 09 December 2009 11:51

Today Energy and Commerce Committee Chairman Henry A. Waxman and Oversight and Investigations Subcommittee Chairman Bart Stupak released a new report which found that 34 Medicare Advantage insurers expend significant sums on profits, marketing, and other corporate expenses. Last year, the insurers spent an average of $1,450 per beneficiary on profits, marketing, and other corporate expenses, nearly ten times as much as traditional Medicare spent on administrative expenses per beneficiary. On average, Medicare Advantage insurers spent over 15% of premium revenue on profits, marketing, and other corporate expenses. Two-thirds of the Medicare Advantage insurers surveyed by the Committee had a "medical loss ratio" - the percentage of premium revenues used to pay medical claims - below 85% during at least one of the four years examined. In contrast, traditional Medicare spends 98% of its money on medical care. If all Medicare Advantage plans had spent at least 85% of their premium dollars on medical care from 2005 to 2008, they would have spent an additional $3 billion on medical care for seniors. "Medicare plays a critically important role in insuring that millions of Americans receive the health care they need," said Rep. Waxman. "But as this report shows, Medicare Advantage insurers are squandering billions of dollars on overhead costs - in fact, they spend ten times the amount per beneficiary as traditional Medicare. Our health care bill includes much needed reforms to the Medicare Advantage payment system. There is no reason for Medicare to pay private insurers more than traditional Medicare pays in any community in the country. That will insure that taxpayer dollars are spent wisely." "Medicare Advantage was never intended to be a program for insurance companies to pad their corporate expense accounts," said Rep. Stupak. "Seniors pay Medicare Advantage premiums with the expectation that the money will be used to provide critical medical care - not pay for marketing campaigns and executive bonuses. The disparity between the percentage of premiums used to pay medical claims in traditional Medicare and Medicare Advantage is unacceptable; our seniors deserve better. This report is just the latest example of private insurance companies exploiting the Medicare Advantage system for their own gain." At the request of Chairman Waxman and Subcommittee Chairman Stupak, the majority Committee staff analyzed premium revenues, medical claim payments, marketing costs, profits, and other data from 34 major Medicare Advantage insurers. The report found: From 2005 through 2008, the average Medicare Advantage insurer spent over 15% of premium revenue on profits, marketing, and other corporate expenses. Two-thirds of the Medicare Advantage insurers surveyed by the Committee had a medical loss ratio below 85% during at least one of the four years examined. Six of the insurers had medical loss ratios below 75% in one or more years. In comparison, traditional Medicare spends less than 1.5% on administrative expenses and over 98% on health care. In the aggregate, the Medicare Advantage insurers spent $1,450 per beneficiary in 2008 on profits, marketing, and other corporate expenses, nearly ten times as much as traditional Medicare spent on administrative expenses per beneficiary. Requiring all Medicare Advantage insurers to have a medical loss ratio of 85% would provide billions of dollars in additional medical services to seniors. The total amount spent on profits, marketing, and other expenses by Medicare Advantage insurers over the last four years was $27 billion. The House health care reform bill requires Medicare Advantage plans to spend at least 85% of their total premium revenues on medical claims. If this threshold had been in effect from 2005 through 2008, the Medicare Advantage insurers would have spent an additional $3 billion on their beneficiaries' medical care, enough to eliminate all copays for preventive care for all Medicare beneficiaries for ten years. In 2007 and 2008, Medicare Advantage insurers with medical loss ratios lower than 85% paid their executives over $1.2 billion. In 2007, a company that had a medical loss ratio of 79% paid an executive over $35 million. The same company paid 16 more executives salaries and bonuses worth $1 million or more. Another company with a medical loss ratio of 79% paid more than $210 million in compensation to 260 executives. Medicare Advantage insurers have spent millions on expensive retreats. In 2007, one company with a medical loss ratio of 83% spent $3.1 million for two events in Hawaii. In 2007, a company with a medical loss ratio of 84% spent $2.5 million on employees and agents at a retreat in San Jose del Cabo, Mexico and $1.4 million on an event in Rome, Italy. In 2008, a company with a medical loss ratio of 82% spent $1.5 million on a meeting in Edinburgh, Scotland and $1.8 million on a trip to Cancun, Mexico. Documents: Profits, Marketing, and Corporate Expenses in the Medicare Advantage Market

Nancy Hamant on Medicare Advantage: "What a crock!"

From Nancy Hamant, May 23, 2007

Subject: Fwd: Medicare privatization and where are the press when you need them?

It appears that part of the monthly Medicare premium of $93.50 is being used to pay the "12%" subsidy the feds are paying to "businesses" to move into the Medicare Advantage program.

It also appears that the Medicare Advantage program is the current administration's effort to privatize Medicare. Also, the Medicare Advantage programs will eventually cost more!

What a crock!

Nancy Hamant

---

From Frank Kaiser (Suddenly Senior), May 23, 2007

Subject: [SeniorNews] As Medicare goes private, the press just stands by - from Suddenly Senior

As Medicare goes private, the press just stands by

COMMENTARY

May 22, 2007

The government sounds like the voice of the insurance industry as it hucksters older Americans into joining 'Medicare Advantage,' a means of unraveling the popular, effective program. Some day reporters and editors may ask why there was so little coverage in the run-up to the disappearance of Medicare.

By Gilbert Cranberg Des Moines Register and Tribune. gilcranberg@yahoo.com

The press was on its toes when the Bush Administration proposed private investment accounts, saw it for the scheme to privatize Social Security that it was, reported on it and thus helped derail privatization when the public understood what was at stake.

Not so with the administration's plan to privatize Medicare.

Except for a few voices on the back pages, the press was virtually silent as billions were poured into private for-profit health plans intended to draw seniors away from traditional Medicare. Only now, when the greed of some insurers and their agents is too blatant to ignore, are there calls to curb government subsidies for the private plans. Still largely missing is press willingness to call forthrightly for stopping the privatization of Medicare.

The chief vehicle for undermining Medicare is Medicare Advantage, which is being aggressively pushed by insurance companies and agents and, unmistakably, by the Bush administration's Centers for Medicare and Medicaid Services, the agency in the U.S. Department of Health and Human Services that oversees Medicare. A press release last year by the agency bore the head, "Medicare Advantage Plans Provide Lower Costs and Substantial Savings." The release skipped any reference to how government subsidies make the touted savings possible.

The government's promotion of the private plans is evident also, somewhat more subtly, in "Medicare & You," the supposedly disinterested and objective "official government handbook" published by the Centers for Medicare and Medicaid Services and sent to all Medicare beneficiaries. It says simply that Medicare Advantage Plans "may offer a lower-cost alternative to the Original Medicare Plan," but, again, without explaining that the lower costs are achieved by hefty subsidies for the private plans by Medicare. Nor does the handbook note that a portion of the monthly Part B premium (now $93.50) seniors pay for physician services helps underwrite the subsidy.

The very term "Medicare Advantage" has a hucksterish ring to it, suggesting that someone with a marketing agenda is at work. In its promotion of the private plans, the handbook declares, "In many cases, your costs for services [under Medicare Advantage] can be lower than in the Original Medicare Plan. Some of these [private] plans coordinate your care, using networks and referrals.... This can help manage your overall care and can also result in savings to you."

The handbook generally downplays the cost of co-pays.

Medicare is stunningly successful and popular. Why would anyone want to desert it? Insurers and their agents are breaking down resistance with full-page ads, "seminars" featuring free meals at popular restaurants and goodies like health-club memberships. Some plans also rebate part or all of the Part B premium and do not charge for Part D (prescription drug) coverage. The need to drop costly Medigap coverage is an especially powerful lure for Medicare

Advantage. Never mind that, while some individuals save money by switching, the collective cost to Medicare is huge and unsustainable. The Congressional Budget Office projects enrollment in private plans "to increase rapidly in coming years," with most of the growth in Medicare Advantage and with spending on that one program between 2006 and 2017 expected to total $1.5 trillion.

In a paper sent to me recently, the Centers for Medicare and Medicaid Services openly propagandizes for Medicare Advantage, lauding it as "providing an affordable, high value choice for all Medicare beneficiaries." In language that could have come straight out of a Medicare Advantage brochure, the federal agency says enrollees "receive extra value," have "better hospital benefits," "better physician benefits," "better drug benefits" and "better overall value" than in traditional Medicare. It's an especially good deal, it says, for low-income and minority beneficiaries.

Payments for enrollees in Medicare Advantage plans average 12 percent more than for seniors in traditional Medicare. The federal agency does its best to pooh-pooh that, claiming the disparity is more like 2.8 percent.

Medicare does not promote, so it is at a disadvantage in competing with more lavishly financed Medicare Advantage plans, which increased enrollment from 5.3 million in 2003 to 8.3 million last February. Call traditional Medicare Medicare Disadvantage.

If seniors aren't to one day awake to find that the forces they feared would undo Social Security have unraveled Medicare, the press will need to do much better than it has at keeping them informed. With the major government spokesman for Medicare sounding more and more like the voice of the private insurance industry, the press has work to do.

Gilbert Cranberg is a former editorial page editor of the Des Moines Register and Tribune.

Look for a strong "push" by STRS to force Medicare Advantage upon STRS retirees

From John Curry, December 23, 2008

After looking at the Medicare Advantage "hard sell" presentation given on Dec. 12, 2008 to STRS it appears as though we had best be prepared to battle "forced" participation in a Medicare Advantage program like SERS recipients have now been placed in. All this at a time when our President-elect has positioned himself against the profiteering of Medicare Advantage programs and his party now has additional seats in Congress to make sure this comes to fruition.

Now, STRS isn't an "insurance company" but, should the Medicare Advantage scheme be adopted, then STRS would be a Medicare insurance company in and of themselves. STRS is eagerly eyeballing the 13% "extra" governmental funds that would come their way should this program be shoved down our throats.

They, I feel, are looking at this additional 13% as a way to prolong the life of our healthcare stabilization fund...a noble cause IF no benefit cuts (as compared to regular Medicare) in medical services would be suffered by retirees....."IF".. that's the key word.

Right now, I'd sooner take my chances and place my trust in Uncle Sam rather than Uncle Michael (Nehf) for the administration of Medicare. I don't want to chance that the "spending on the delivery of care (medical services) falls short of expected levels," as stated in the articles below.

IF Congress chops that additional 13% from the funding of the Medicare Advantage programs then STRS's desire to implement this program will lose it's anticipated pot of gold at the end of the rainbow and we'll be back at "square one," won't we? Give me the regular old-fashioned Medicare any day!

John

http://www.standupforhealthcare.org/blog/

archives/insurance_cos_profit_from_medicare/

Insurance cos. profit from medicare
Posted by: Angela Shubert on Dec 19, 2008

Insurance companies would never pocket extra money on the backs of Medicare beneficiaries. Or would they?

According to a report released by the Government Accountability Office (GAO) last week, insurers that sell private plans to Medicare beneficiaries made a whopping $601.79 in profits per enrollee in 2006, a profit margin 65 percent higher than anticipated. Actual spending on non-medical expenses, such as administrative costs, was also substantially higher than projections, while spending on the delivery of care fell short of expected levels.

Since 2003, when the Medicare Modernization Act authorized substantial new funding for Medicare plans operated by private insurers, known as Medicare Advantage plans, a debate on whether these plans provide good value to both enrollees and taxpayers has been raging. These data offer new fuel to the fire in this debate.

Proponents of private Medicare plans have long argued that the "efficiency of the private market" would save taxpayer money while increasing access to care for beneficiaries. The GAO's report suggests that this assertion simply isn't true. Only 83 percent of Medicare Advantage plan revenues actually go to providing care. The remaining 17 percent of Medicare Advantage revenues go toward administrative costs, overhead and profits. In contrast, traditional Medicare accumulates no profits from its revenues and spends a mere 2 percent on administrative costs.

Rather than increase efficiency and access, Medicare Advantage has served to direct precious taxpayer dollars away from Medicare beneficiaries and into the pockets of insurers. Stronger oversight of the insurance industry is essential. When the federal government purchases goods and services, we expect accountability. Taxpayers and beneficiaries deserve to know that premium dollars are being spent in a way that maximizes value and promotes efficiency.

Last week at a press conference announcing Tom Daschle as the new Secretary of Health and Human Services, a journalist asked President-Elect Obama how he intended to find money to pay for health care reform legislation. In his answer, Obama indicated that regulation of Medicare Advantage insurers would be a necessary way to save money and improve quality.

We're also going to examine programs that I'm not sure are giving us a good bang for the buck. The Medicare Advantage program is one that I've already cited where we're spending billions of dollars subsidizing insurance companies for a program that doesn't appreciably improve the health of seniors under Medicare.

Some members of Congress have also talked about enacting "minimum medical loss standards," which would require health insurance companies to spend a certain percentage of premium dollars on medical care (as opposed to administrative costs or profits). Such standards would allow insurers to retain reasonable profits, while ensuring that taxpayer dollars are spent wisely.

Now that sounds like a deal that is fair to insurers, taxpayers, and beneficiaries.

From the Washington Post re. Medicare Advantage:

Medicare insurers' profits exceed expectations

By KEVIN FREKING
The Associated Press
Thursday, December 11, 2008; 4:40 AM

Washington Post

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/11/AR2008121100443_pf.html

WASHINGTON -- Health insurance companies that serve the elderly and disabled in Medicare are realizing significantly higher profits than they anticipated, resulting in the companies getting $1.3 billion more than projected, congressional auditors say.

Under a program called Medicare Advantage, the federal government pays insurers for delivering Medicare benefits. The insurance companies' payments are based, in part, on their anticipated revenues and expenses. If the companies had been more accurate, they could have spent much of that $1.3 billion on enhanced health benefits or lower monthly premiums, and they still would have maintained their expected profit margin, the Government Accountability Office said in a report expected to be released Thursday.

The GAO studied the Medicare Advantage program for 2006, the most recent year for which figures were available.

Rep. Pete Stark, D-Calif., who requested the analysis, said the government spends more on beneficiaries when they're in Medicare Advantage than if they're in traditional Medicare, about 13 percent more on average.

"This puts to bed this idea the plans are offering tremendous extra benefits with the overpayments," said Stark, a frequent critic of the program. "The overpayments are going to profits."

The Associated Press obtained a copy of the correspondence from the GAO to Stark.

Stark, chairman of the House Ways and Means health subcommittee, said he will push for legislation next year that would lower the government's payments to insurers, an idea that President-elect Barack Obama backed on the campaign trail. But supporters of the Medicare Advantage program said participants are happy with their benefits, and they note that millions have enrolled in the program in recent years as a result.

Any attempts to scale back payments to private insurers would lead to benefit cuts or higher premiums for seniors in those plans, supporters of the program contend. About three-quarters of Medicare's 45 million beneficiaries are still enrolled in traditional Medicare, in which the government pays health care providers a set fee for particular services.

The GAO said that Medicare Advantage insurers generated $50 billion in revenue during 2006. On average, plans earned profits of 6.6 percent and they had projected to the federal government that they would earn profits of 4.1 percent.

The insurance plans also spent less covering medical expenses than anticipated, with 83.3 percent of revenue going to medical expenses. They had projected that nearly 87 percent of revenue would go to expenses.

In responding to the report, federal officials said the insurers' estimates for expenses were within a standard range, given the difficulty in forecasting medical trends and spending. They also stressed that Congress set up the payment structure for Medicare Advantage plans to make sure beneficiaries had wide access to the program.

"The goal of the payment structure, as mandated by Congress, was to ensure broader access to MA plans, particularly for lower-income, minority and rural beneficiaries," said Jeff Nelligan, spokesman for the Centers for Medicare and Medicaid Services.

___

On the Net:

Government Accountability Office:http://www.gao.gov/

Article: The Trouble With Medicare Advantage

“In West Virginia, 37,000 retired state employees and teachers covered by the Public Employees Insurance Agency (PEIA) were forced out of traditional Medicare and stripped of their supplemental plan. They were enrolled in Advantra Freedom, an MA plan administered by the for-profit giant, Coventry Health Care. In November, in PEIA hearings, hundreds of angry West Virginian retirees testified against Advantra Freedom.”

http://takingnote.tcf.org/2008/07/the-trouble-wit.html
July 15, 2009

The Trouble With Medicare Advantage

by Maggie Mahar

Everyone understands why Congress was so reluctant to cut physicians’ fees. Reimbursements for primary care physicians are very low—so low that 30 percent of Medicare recipients who are looking for a new medical home can’t find one. Cut fees, and fewer doctors will take Medicare patients. The AMA, seniors and the AARP are all up-in-arms. Few politicians like to disappoint this trio.

But why are so many Congressmen willing to cut Medicare Advantage? After all, one out of five seniors is in the program: Won’t they be upset?

The truth is that, as many seniors have discovered, Medicare Advantage fee-for-service (the plan Congress has now voted to phase out by 2011) is not turning out to be an advantage for them.

Here is what David Fillman, an International Vice President of the American Federation of State, County and Municipal Employees (AFSCME), which represents some 1.4 million workers, had to say about MA’s fee-for-service insurance when he testified before Congress in January:

“Insurance companies have targeted our employers for the hard sell, including offers to pass through some of the federal subsidies to state and local governments.”

Fillman rightly calls the subsidies a “windfall” –Medicare pays fee-for-service Medicare Advantage 17 percent more than Medicare would spend if it delivered the services itself.

Public Employees Forced into Medicare Advantage

Fillman goes on to explain: “The new accounting rules issued by the Governmental Accounting Standards Board (GASB) place a tremendous strain on public retiree health benefits and add to the lure of these private Medicare plans. The GASB rules require public employers to estimate future costs of their retiree health benefits – 35 years into the future – and publish them on their annual financial statements. To reduce this paper liability, more public employers are proposing a switch from their own solid retiree health plans, which include traditional Medicare, to these private Medicare plans. This is a major factor in public employers’ decisions to switch to Medicare Advantage private fee-for-service plans.

“In my state [Pennsylvania] Governor Rendell plans to replace our Retired Employees Health Program (REHP) for state government retirees with a Medicare Advantage private-fee-for-service plan and proposes to cut our prescription drug benefits,” Fillman explained. “He is removing retirees who are aged 65 and older from the secure state plan and forcing them out of the traditional Medicare program. By removing retirees from the secure state public plan (REHP), the Governor is denying them their right to access the secure Medicare program they have paid into all their lives.

“Our retirees are moving from the Medicare defined benefit plan with a solid wrap-around supplemental, to an unknown plan. Although these private Medicare replacement plans must be the actuarial equivalent of Medicare they have a broad hand in shaping the details and setting co-payments, premiums and the real value of benefits from year to year.” In other words, the plans are complicated, and the plan you sign up for this year may not cover the same benefits next year. As Fillman puts it, “Experts have joked that if you have seen one Medicare Advantage fee-for-service plan then you’ve seen one MA plan – for that year.

“Aside from the confusion and added complexity, the forced shift to a Medicare replacement product can obscure a reduction in benefits and a shift of costs onto beneficiaries who have limited incomes and may be in fragile health.”

Advantage supporters like U.S. Senator Tom Coburn, like to argue that Advantage fee-for-service offers Choice : “Medicare Advantage offers seniors personal choice and control over their health care decisions” But if benefits aren’t transparent, how can seniors make a real choice?

“We oppose this forced switch both from our understanding of its impact on Medicare generally as well as our fellow AFSCME members’ experiences in West Virginia. Those retirees were forced out of Medicare and into an MA private fee-for-service plan last July,” Fillman observed. “We also are beginning to hear from AFSCME retirees in Ohio who were just switched over this month to a Medicare Advantage private fee-for-service plan.

“In West Virginia, 37,000 retired state employees and teachers covered by the Public Employees Insurance Agency (PEIA) were forced out of traditional Medicare and stripped of their supplemental plan. They were enrolled in Advantra Freedom, an MA plan administered by the for-profit giant, Coventry Health Care. In November, in PEIA hearings, hundreds of angry West Virginian retirees testified against Advantra Freedom.”

Seniors Tell Their Stories

One senior at the Charleston hearing, Peggy Beavers, complained that Coventry is “known throughout the country to cut costs any way they can”, and said she did not understand why she would be forced out of Medicare into a replacement product offered by “a company that’s all about making a profit for itself.”

“Specifically,” Filllman testified, “AFSCME is concerned about the following complaints we have received from West Virginia and other states regarding PFFS plans. These concerns are typical of the problems inherent to MA private-fee-for service plans.

• Even though these plans are marketed as nationwide and have no networks – this is false. They limit access to care and choice because significant numbers of doctors and hospitals have refused to accept the card, especially out-of-state. For example, many West Virginia retirees who moved out of state could get no doctor to accept the private MA plan.
  
  
• MA private fee-for-service plans may offer additional benefits, such as gym memberships (the only major additional benefit in West Virginia), or hearing aids and eyeglass coverage, but they modify their benefits to cut corners in more important areas, such as limiting hospital days or charging higher co-pays for nursing homes than Medicare. Indeed, officials in West Virginia actually told a state legislative committee in November that “we know that … retirees who use more medical care will be worse off under this plan”.
  
  
• PFFS plans more frequently deny claims in order to hold down costs.
  
  
• The appeals processes are more difficult under the private plans. Retirees are no longer enrolled in traditional Medicare and must go through the company rather than Medicare’s transparent appeals process. Further, beneficiaries are often bounced between CMS and the insurance company seeking redress.
  
  
• The subsidy to the private plans causes government employers, many of whom have secure, self-insured medical plans, to switch control of their medical decisions to these private companies, break up their efficient risk pools, and allow private companies to profit off our retirees.
  
  
• The plans are not stable. They can and do pull out of markets, disrupting health care services and causing much anxiety among beneficiaries.

“There is a lack of quality and accountability. These private replacements for Medicare are exempt from basic quality reporting requirements.

“In addition, “ Fillman concluded, “we are concerned that Medicare Advantage plans are a drain on our state and its retirees. The more than one million Pennsylvania seniors who are enrolled in traditional Medicare are paying about $25 million in extra premiums to subsidize the 32 percent of beneficiaries who are enrolled in Medicare Advantage plans. The State is also paying for these subsidies. The Medicaid program in Pennsylvania pays Part B premiums for low-income beneficiaries and this cost was an extra $6.3 million in FY 2007.

“When Congress opened up Medicare to private plans, it was based on the claim that the health insurance industry would be more efficient, provide more care coordination, and do so at less cost to taxpayers. PFFS plans do none of the above, and enrollees who are forced into them are no longer enrolled in Medicare.

“Again, the root of these problems is the excessive financial incentives to develop and market these products which are designed to replace the tried and true Medicare program. These problems, the trend towards private plans, and the devastating privatization of our traditional Medicare program must be addressed. We concur with the recommendations made by the Medicare Payment Advisory Commission (MedPAC ) that MA private plans should compete with traditional Medicare on a level payment playing field.”

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

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.

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.

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.

http://blogs.usatoday.com/oped/2009/09/debate-on-paying-for-health-reform-part-ii-our-view-how-medicare-advantage-turned-into-a-boondoggle.html#more

STRS forcing us out of traditional Medicare? ...let's see what happened when West Virginia retired teachers were forced out of traditional Medicare!

From John Curry, May 14, 2009

“In West Virginia, 37,000 retired state employees and teachers covered by the Public Employees Insurance Agency (PEIA) were forced out of traditional Medicare and stripped of their supplemental plan. They were enrolled in Advantra Freedom, an MA plan administered by the for-profit giant, Coventry Health Care. In November, in PEIA hearings, hundreds of angry West Virginian retirees testified against Advantra Freedom.”

July 9, 2008

The Trouble with Medicare Advantage

http://www.healthbeatblog.org/2008/07/the-trouble-wit.html

Everyone understands why Congress was so reluctant to cut physicians’ fees. Reimbursements for primary care physicians are very low—so low that 30 percent of Medicare recipients who are looking for a new medical home can’t find one. Cut fees, and fewer doctors will take Medicare patients. The AMA, seniors and the AARP are all up-in-arms. Few politicians like to disappoint this trio.

But why are so many Congressmen willing to cut Medicare Advantage? After all, one out of five seniors is in the program: Won’t they be upset?

The truth is that, as many seniors have discovered, Medicare Advantage fee-for-service (the plan Congress has now voted to phase out by 2011) is not turning out to be an advantage for them.

Here is what David Fillman, an International Vice President of the American Federation of State, County and Municipal Employees (AFSCME), which represents some 1.4 million workers, had to say about MA’s fee-for-service insurance when he testified before Congress in January:

“Insurance companies have targeted our employers for the hard sell, including offers to pass through some of the federal subsidies to state and local governments.”

Fillman rightly calls the subsidies a “windfall” –Medicare pays fee-for-service Medicare Advantage 17 percent more than Medicare would spend if it delivered the services itself.

Public Employees Forced into Medicare Advantage

Fillman goes on to explain: “The new accounting rules issued by the Governmental Accounting Standards Board (GASB) place a tremendous strain on public retiree health benefits and add to the lure of these private Medicare plans. The GASB rules require public employers to estimate future costs of their retiree health benefits – 35 years into the future – and publish them on their annual financial statements. To reduce this paper liability, more public employers are proposing a switch from their own solid retiree health plans, which include traditional Medicare, to these private Medicare plans. This is a major factor in public employers’ decisions to switch to Medicare Advantage private fee-for-service plans.

“In my state [Pennsylvania] Governor Rendell plans to replace our Retired Employees Health Program (REHP) for state government retirees with a Medicare Advantage private-fee-for-service plan and proposes to cut our prescription drug benefits,” Fillman explained. “He is removing retirees who are aged 65 and older from the secure state plan and forcing them out of the traditional Medicare program. By removing retirees from the secure state public plan (REHP), the Governor is denying them their right to access the secure Medicare program they have paid into all their lives.

“Our retirees are moving from the Medicare defined benefit plan with a solid wrap-around supplemental, to an unknown plan. Although these private Medicare replacement plans must be the actuarial equivalent of Medicare they have a broad hand in shaping the details and setting co-payments, premiums and the real value of benefits from year to year.” In other words, the plans are complicated, and the plan you sign up for this year may not cover the same benefits next year. As Fillman puts it, “Experts have joked that if you have seen one Medicare Advantage fee-for-service plan then you’ve seen one MA plan – for that year.

“Aside from the confusion and added complexity, the forced shift to a Medicare replacement product can obscure a reduction in benefits and a shift of costs onto beneficiaries who have limited incomes and may be in fragile health.”

Advantage supporters like U.S. Senator Tom Coburn, like to argue that Advantage fee-for-service offers Choice : “Medicare Advantage offers seniors personal choice and control over their health care decisions” But if benefits aren’t transparent, how can seniors make a real choice?

“We oppose this forced switch both from our understanding of its impact on Medicare generally as well as our fellow AFSCME members’ experiences in West Virginia. Those retirees were forced out of Medicare and into an MA private fee-for-service plan last July,” Fillman observed. “We also are beginning to hear from AFSCME retirees in Ohio who were just switched over this month to a Medicare Advantage private fee-for-service plan.

“In West Virginia, 37,000 retired state employees and teachers covered by the Public Employees Insurance Agency (PEIA) were forced out of traditional Medicare and stripped of their supplemental plan. They were enrolled in Advantra Freedom, an MA plan administered by the for-profit giant, Coventry Health Care. In November, in PEIA hearings, hundreds of angry West Virginian retirees testified against Advantra Freedom.”

Seniors Tell Their Stories

One senior at the Charleston hearing, Peggy Beavers, complained that Coventry is “known throughout the country to cut costs any way they can”, and said she did not understand why she would be forced out of Medicare into a replacement product offered by “a company that’s all about making a profit for itself.”

“Specifically,” Filllman testified, “AFSCME is concerned about the following complaints we have received from West Virginia and other states regarding PFFS plans. These concerns are typical of the problems inherent to MA private-fee-for service plans.

• Even though these plans are marketed as nationwide and have no networks – this is false. They limit access to care and choice because significant numbers of doctors and hospitals have refused to accept the card, especially out-of-state. For example, many West Virginia retirees who moved out of state could get no doctor to accept the private MA plan.
  
• MA private fee-for-service plans may offer additional benefits, such as gym memberships (the only major additional benefit in West Virginia), or hearing aids and eyeglass coverage, but they modify their benefits to cut corners in more important areas, such as limiting hospital days or charging higher co-pays for nursing homes than Medicare. Indeed, officials in West Virginia actually told a state legislative committee in November that “we know that … retirees who use more medical care will be worse off under this plan”.
  
• PFFS plans more frequently deny claims in order to hold down costs.
  
• The appeals processes are more difficult under the private plans. Retirees are no longer enrolled in traditional Medicare and must go through the company rather than Medicare’s transparent appeals process. Further, beneficiaries are often bounced between CMS and the insurance company seeking redress.
  
• The subsidy to the private plans causes government employers, many of whom have secure, self-insured medical plans, to switch control of their medical decisions to these private companies, break up their efficient risk pools, and allow private companies to profit off our retirees.
  
• The plans are not stable. They can and do pull out of markets, disrupting health care services and causing much anxiety among beneficiaries.

“There is a lack of quality and accountability. These private replacements for Medicare are exempt from basic quality reporting requirements.

“In addition, “ Fillman concluded, “we are concerned that Medicare Advantage plans are a drain on our state and its retirees. The more than one million Pennsylvania seniors who are enrolled in traditional Medicare are paying about $25 million in extra premiums to subsidize the 32 percent of beneficiaries who are enrolled in Medicare Advantage plans. The State is also paying for these subsidies. The Medicaid program in Pennsylvania pays Part B premiums for low-income beneficiaries and this cost was an extra $6.3 million in FY 2007.

“When Congress opened up Medicare to private plans, it was based on the claim that the health insurance industry would be more efficient, provide more care coordination, and do so at less cost to taxpayers. PFFS plans do none of the above, and enrollees who are forced into them are no longer enrolled in Medicare.

“Again, the root of these problems is the excessive financial incentives to develop and market these products which are designed to replace the tried and true Medicare program. These problems, the trend towards private plans, and the devastating privatization of our traditional Medicare program must be addressed. We concur with the recommendations made by the Medicare Payment Advisory Commission (MedPAC ) that MA private plans should compete with traditional Medicare on a level payment playing field.”

Bloomberg.com even gave this well deserved title -- "Rip-off" -- to Medicare Advantage programs!

......and some at STRS want to implement Medicare Advantage?????
From John Curry, February 4, 2009
Medicare ‘Rip-Off’ Strikes U.S. Elderly as Obama Maps Overhaul

By Avram Goldstein

Feb. 4 (Bloomberg) -- Just as President Barack Obama starts his overhaul of the U.S. medical system, providers of U.S.- backed health plans for the elderly are jacking up prices.

Humana Inc., Health Net Inc. and other providers increased 2009 premiums by 13 percent on average, or more than five times as much as last year, for people who use the Advantage version of Medicare, according to Avalere Health, a consulting company in Washington. The elderly say higher costs for the Advantage plans, which add features such as drug coverage to Medicare, are reducing money for groceries and utilities.

Obama has vowed to control spending in the $2.6 trillion U.S. health-care system while extending coverage to more people, and, during his campaign, criticized the costs of Advantage plans to taxpayers. The premium increases, charged directly to the elderly rather than the government, are further evidence that insurers’ need for profits is ballooning patients’ expenses and reducing the efficiency of care, said Arnold Relman, former editor of the New England Journal of Medicine.

“Medicare Advantage is a rip-off,” said Relman, 85, who is also a professor emeritus at Harvard Medical School in Boston, in a telephone interview on Jan. 23. “I cannot see that they do anything better than public insurance does, and they do a lot of things worse.”

Medicare will spend 14 percent more this year, on average, for Advantage enrollees than for beneficiaries with basic coverage, according to a staff report in December by the Medicare Payment Advisory Commission, an independent agency that advises Congress.

Obama’s Stance

Obama considers the government payments “excessive,” said Jen Psaki, a spokeswoman now on the White House staff, in a Jan. 5 e-mail. During his campaign Obama promised to cut subsidies to Advantage by as much as $15 billion a year, or about 15 percent from last year’s total of $100 billion.

In addition, insurers collected about $5 billion in Advantage premiums from consumers last year, said Thomas Scully, the former top administrator of the U.S. Centers for Medicare & Medicaid Services, with headquarters in Baltimore. Scully, a lawyer with New York-based private equity firm Welsh, Carson, Anderson & Stowe. Scully, who helped design the Advantage program, also works for Alston & Bird, a law firm based in Atlanta.

Medicare is the U.S. health plan for the disabled and those over 65. Basic Medicare, with a monthly fee of $96, lets patients use any U.S. doctor or hospital. Beneficiaries can also buy separate private policies to cover prescription drugs and expenses exempted from standard benefits. Advantage, which covers 10.5 million people, bundles those options.

‘Good Plans’

“There are almost 11 million people who have chosen to participate in Medicare Advantage because they feel they’re good plans,” said Richard Barasch, chief executive officer of Universal American Corp., an insurer in Rye Brook, New York, in a telephone interview. “Medicare Advantage is a great value to them.”

The Advantage premiums paid by Blair Law and his wife, Mary, soared to $50 a month this year, up from zero under the policy’s initial terms.

“These guys have you by the short hairs,” said Blair Law, 77, a retired construction-company executive now living in Fort Myers, Florida, in a telephone interview. “They know you’re disinclined to shift to another plan, so they keep ratcheting the cost up.”

In 2007, the Laws joined an Advantage plan provided by Universal Health Care Corp. of St. Petersburg, Florida. Initially, the plan charged no monthly premium, and the insurer rebated the couple’s basic-Medicare premiums, according to the Laws. The rebate ended last year, and this year the company began charging the couple an additional $50 a month.

‘Real Hardship’

Pinched for funds, Law said he doesn’t eat as much beef as before, uses less air conditioning, and will cut back travels to see relatives across the country.

“That’s a real hardship,” Law said.

Universal Health Care Chief Executive Officer Akshay Desai didn’t respond to a request for comment. Many Advantage policies had no monthly payments first, according to analysts.

The absence of premiums was a “come-on” to spur enrollment for many insurers and was “unsustainable,” said Uwe Reinhardt, a professor of political economy at Princeton University in New Jersey. Advantage plans serve about 23 percent of Medicare enrollees, up from about 12 percent in 2003, according to Medicare officials.

“The insurers’ dream was that maybe 80 percent of the elderly would enroll in Medicare Advantage and then traditional Medicare would just die, and these private health plans could do what they want,” Reinhardt, whose specialty is health-care issues, said in a telephone interview on Jan. 23.

Investor Wariness

Investors, favorable toward price increases yet wary of the threat of cuts in U.S. subsidies, aren’t sure if there is money to be made in stocks of Advantage providers, said Carl McDonald, an analyst with Oppenheimer & Co. in New York. Most of the companies, in any case, also have other profit centers, and their fate isn’t tied wholly to Advantage.

On average, the almost 200 companies selling Advantage policies raised prices 13 percent this year for enrollees, to $41.40 a month, according to Avalere Health. In 2008, premiums rose 2.5 percent, Avalere found.

Humana, based in Louisville, Kentucky, more than doubled average premiums for its Advantage clients, to $30 from $14, the largest percentage jump identified in the Avalere analysis conducted for Bloomberg News. Universal American had the second- largest rise among publicly traded companies, moving up average monthly premiums 44 percent to $39. Health Net, of Woodland Hills, California, increased the monthly fee 24 percent to $51.

Ambulance Rides

In calculating the averages, Avalere compared premiums for plans offered in both 2008 and 2009 and weighted each company’s average increase by membership.

Health Net, Humana and other insurers also are requiring elderly plan members to pay more for ambulance rides and hospital stays or raise the amount people must spend before 100 percent coverage kicks in, according to Medicare data.

Humana, with 1.44 million Advantage members on Dec. 31, said yesterday it expects to add no more than 75,000 people to the plans this year, after gaining 293,000 last year. Health Net said yesterday its Advantage enrollment may fall as much as 2 percent this year, from 295,000 at the end of last year.

Not all companies are raising premiums. UnitedHealth Group Inc. dropped what it said were unprofitable Advantage plans for the chronically ill and increased out-of-pocket costs in other Advantage plans. The company, based in Minnetonka, Minnesota, is the largest Advantage provider, with 1.6 million members.

‘Disheartening’

UnitedHealth is counting on competitors’ premium increases to drive the elderly to its policies, said Simon Stevens, former head of the insurer’s Medicare plans, in an e-mail. The company added at least 97,000 customers for policies that began on Jan. 1, according to U.S. government figures.

Meanwhile, Martha Baker, 74, said her Health Net plan increased her share of costs for ambulance care and other services this year. Her premium also went up, to $38 a month from zero.

“What’s disheartening is, I’m a person who has never taken from the system,” said Baker, who retired after directing the women’s ministry at a Tucson, Arizona, church. “I’ve always paid into it, and now it seems to be failing me.”

http://www.bloomberg.com/apps/news?pid=20601103&sid=av1lMcI6E1no&refer=us#

Cleveland Plain Dealer re: Medicare Advantage

From John Curry, September 9, 2009

HEALTH CARE FACT CHECK: Medicare Advantage not all that advantageous for seniors, government

Cleveland Plain Dealer, September 9, 2009

Q: I am a senior on Medicare Advantage and I like my plan, which covers some services not provided by traditional Medicare. But President Obama has said that he will eliminate Medicare Advantage to pay for his health care overhaul, which means I must go to a new plan. Does that mean I will have to pay the 20 percent co-payment that traditional Medicare now requires, or else have to buy a gap coverage to cover that 20 percent, at a cost of $150 to $250 a month? How is this fair?

A: This is an important question for seniors, containing truths, myths and a bit of political baggage. It also underlies an overlooked point: Senior citizens get a good deal from Medicare. Workers pay taxes into the basic hospitalization program and then, when they retire, they see about $96 a month deducted from their Social Security to pay for doctor's visits and outpatient care.

The average senior gets far more in benefits out of this government program than he or she ever pays in. Someone retiring in 2008 would have paid, on average, $30,650 in Medicare taxes during his or her working years, yet will receive on average $85,360 in hospitalization benefits, if male, or $81,570 if female, according to actuaries at the federal Centers for Medicare and Medicaid Services.

Still, Medicare requires a 20 percent co-payment for outpatient services, and additional co-payments for hospital stays exceeding 60 days. Some seniors simply pay this or work out arrangements with their doctors, while others buy supplemental policies to cover the gap -- and still others turn to Medicare Advantage for all their medical needs.

Medicare Advantage allows seniors to enroll in private health plans, usually through insurers or health maintenance organizations, as an alternative to traditional fee-for-service Medicare. Advantage plans were supposed to operate more efficiently and curtail the explosive growth of Medicare spending because, the thinking went, the private sector could do anything better than federal bureaucrats, and for less money.

For many seniors, this was a great deal, enabling them to avoid the co-payments or gap-coverage policies that many traditional Medicare beneficiaries buy. Some Advantage programs even throw in vision and hearing coverage, though the reader who asked today's question said he does not have those benefits.

About 23 percent of seniors nationwide, and 25 percent in Ohio, are in Advantage plans.

For the government, Advantage plans have not lived up to expectations. Advantage insurers charge the government more money, not less, requiring a taxpayer subsidy that averages 14 percent more per-patient on top of what traditional Medicare pays providers. That's an extra $1,138 per Advantage enrollee nationwide, or $1,166 for those in Ohio, according to a George Washington University analysis.

Medicare Advantage plans also tend to limit the doctors that seniors can see, just as traditional insurers do.

The U.S. Government Accountability Office has noted that many Advantage seniors wind up paying high co-payments when hospitalized, although the reader who asked today's question -- a retired certified public accountant -- said he does not face those kinds of fees under his Advantage plan.

http://www.cleveland.com/news/plaindealer/index.ssf?/base/news/12524852713470.xml&coll=2

Medicare Advantage Plans - from Medicare.gov

Medicare Advantage Plans

From Medicare.gov

http://www.medicare.gov/Choices/Advantage.asp

Medicare Advantage Plans are health plan options that are part of the Medicare program. If you join one of these plans, you generally get all your Medicare-covered health care through that plan. This coverage can include prescription drug coverage. Medicare Advantage Plans include:

• Medicare Health Maintenance Organization (HMOs)
• Preferred Provider Organizations (PPO)
• Private Fee-for-Service Plans
• Medicare Special Needs Plans

When you join a Medicare Advantage Plan, you use the health insurance card that you get from the plan for your health care. In most of these plans, generally there are extra benefits and lower copayments than in the Original Medicare Plan. However, you may have to see doctors that belong to the plan or go to certain hospitals to get services.

To join a Medicare Advantage Plan, you must have Medicare Part A and Part B. You will have to pay your monthly Medicare Part B premium to Medicare. In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer.

If you join a Medicare Advantage Plan, your Medigap policy won’t work. This means it won’t pay any deductibles, copayments, or other cost-sharing under your Medicare Health Plan. Therefore, you may want to drop your Medigap policy if you join a Medicare Advantage Plan. However, you have a legal right to keep the Medigap policy.

To compare Medicare Advantage Plans, go to the Medicare Options Compare.

From Nancy Hamant: A Medicare Advantage Example

Nancy Hamant to Dave Parshall, September 15, 2007
Subject: Medicare Advantage Example--Edited

MEDICARE ADVANTAGE EXAMPLE

The husband dropped out of her SERS plan two years ago due to the increase in monthly premiums for spouses. He joined a Medicare Complete Plan (One of Ohio's Medicare Advantage Plans). His monthly premium was greatly reduced. All was fine for two years, then he had to have full knee replacement surgery this past June. He previously had partial knee replacement surgery (on the opposite knee four years ago) under the SERS insurance plan. He quickly found out that he was responsible for much more of the Hospital bill under the Medicare Complete plan (Advantage) and he also found out that he had to pay a significant co-insurance cost for the required therapy. His solution -- he stopped therapy after one month, convinced he could do it at home on his stationary bicycle and doing "step therapy." Three months later, he has had so much pain and has been on pain-killers for this entire time that all his doctors are appalled. His upper thigh muscle has deteriorated to the extent that he is now ordered to have therapy three times a week (rather than the initial two times) to correct the muscle loss, and he has had the pain medication reduced to a less potent drug for three weeks so that he can now use Aleve. He is fortunately able to get Tier 2 medications through VA as he cannot afford the Medicare Complete costs. Also, he is still thinking about only going to therapy two times a week, as the co-insurance for therapy is still costing thousands.

His wife just received her annual enrollment package from SERS regarding her insurance plan for next year. Her monthly premium for 2007 is $88 a month; her monthly premium for 2008 will be $58 a month -- she is thrilled about that drop in premium. SERS stated that she will be "automatically" enrolled in the new plan (which as STRS staff stated is a Medicare Advantage Plan. Also, in the SERS plan information on their website, which was circulated by CORE, SERS clearly states that if SERS member does not accept the Medicare Advantage plans provided by either Aetna or Med Mutual, no other options are available). She did not have any information as of yet as to any changes in coverage, annual deductibles or co-insurance. So basically, many SERS members will be very happy with the monthly premium reductions, but at this point have no idea as to what will happen when they have to use the plan.

The STRS Medicare Advantage Plan considered was to be only in five counties. STRS's Sandy Knoesel said that STRS staff struggled with making any recommendation to the STRS Board due to the "poor track record" of Aetna and Med Mutual's Medicare Advantages' plans. However, the STRS staff said that Aultcare's record for the five counties was much better, so the STRS staff recommended that it be considered as a "pilot" plan. After much discussion, the STRS Board voted against including a Medicare Advantage plan as the five county situation could not be replicated anywhere else in Ohio.

Also, the September issue of Consumers Report stated that a Medicare Advantage Plan should only be considered by anyone after a complete comparison of the person's current medical plan to the Medicare Advantage Plan be completed by a qualified insurance consultant.

So, it is evident that the SERS members will serve as a "pilot" for all five public pension plans to critically observe and monitor whether or not Medicare Advantage Plans are appropriate options for Ohio's public pensioners.

Nancy Hamant

AMA Survey of M.D.'s: Medicare Advantage plans suck!

"The results of our new survey of physician experience with Medicare Advantage plans are troubling," according to AMA Board Chair Cecil Wilson, M.D.

"More than half of the physicians report that their patients in a Medicare Advantage HMO or PPO plan were denied coverage of services typically covered in the traditional Medicare plan, and 84 percent reported patients have had difficulty understanding how the plan works," said Dr. Wilson.

Source - All Headline News

http://www.allheadlinenews.com/articles/7007429275

Doctors' Experiences With Medicare Advantage Plan "Bleak" Says AMA Survey

May 23, 2007 11:06 a.m. EST

Patricia Shehan - AHN Staff Writer Chicago, IL (AHN) - The American Medical Association (AMA) announced the results of a new survey on Tuesday that indicates doctors' experiences with the Medicare Advantage plans are "bleak."

The AMA provided a statement to the House Ways and Means Subcommittee on Health that highlighted the findings of the survey, expressing the concerns of physicians across the country.

"The results of our new survey of physician experience with Medicare Advantage plans are troubling," according to AMA Board Chair Cecil Wilson, M.D.

"More than half of the physicians report that their patients in a Medicare Advantage HMO or PPO plan were denied coverage of services typically covered in the traditional Medicare plan, and 84 percent reported patients have had difficulty understanding how the plan works," said Dr. Wilson.

"The private health plans were supposed to inject competition into the Medicare program, but instead we've ended up with a federal handout to the insurance industry," Dr. Wilson adds.

"Eliminating the overpayments to the insurance companies will save Medicare $65 billion over five years, according to the government's own estimate," said Dr. Wilson.

The AMA's written statement included the call for a "staunch support of fiscal neutrality between the regular Medicare program and the Medicare Advantage program," in which 51 percent of doctors reported that the Medicare Advantage payments are below the traditional rates of Medicare.

According to the physician survey, 45 percent of the physicians' patients who are in a Medicare Advantage private fee-for-service plan have been denied services that were typically, previously covered in the traditional Medicare plan. Another 80 percent of doctors reported that their patients have had difficulty understanding how the private fee-for-service plan even works.

"It's shameful that under current law Medicare will slash payments to doctors well below the cost of caring for seniors, while increasing payments to highly profitable managed care companies. Congress has to make a choice-preserve access to care for all seniors by stopping next year's Medicare cut to doctors, or continue to help insurance companies line investors' pockets," as written in the AMA statement.

Frank Kaiser: When "Advantage" ISN'T - and what you can do about it

From "Suddenly Senior," July 27, 2007

WHEN "ADVANTAGE" ISN'T

Private Medicare Advantage program is costly and unfair. Now we can do something about it.

By Frank Kaiser

It sounded so, well, so "something-for-nothing, what-have-you-to-lose?"

The Medicare "Advantage" program would provide Carolyn and me with "more benefits than traditional Medicare, more predictable costs," even worldwide coverage.

"A smart investment in your health coverage," the salesman assured us.

But right off, our new Advantage HMO got our primary doctor's name wrong. A simple mistake, they said, easily corrected.

Yet, when I saw an "insurer approved" specialist, recommended by my "insurer approved" primary physician, our insurer wouldn't approve it. The phantom doctor whose name was on my insurance card hadn't authorized it.

That was back in January. By the end of that month, we'd called the insurance company five times asking that they correct their mistake.

They didn't.

Apparently, they couldn't. By June, after 17 phone calls — I'd documented each with date, time, and name of the "service representative" — I threatened to go public with the snafu. Immediately, they rectified the madness.

Demented Dummies

And it all sounded so good last December when the salesman explained how much better his Advantage program was over "plain old Medicare." Eye care, hearing aids, dental, international coverage, you name it. It was ours. Practically free for nothing!

But as the months rolled by, it seemed we were insured by a band of demented dummies.

They'd pay for medicine one month, not the next. Forced to buy my Nexium in Canada on my dime while my doctor cajoled, I pleaded, and even my pharmacy pushed, the HMO would eventually okay my prescription. But then we'd go through the same stonewalling routine the following month. Each time, they profited $150 or so by denying me a month's worth of drugs.

Soon I realized: These folks were dumb like foxes.

I went to VisionWorks where the salesman had said Advantage would "save up to 50 percent." My price for two pair of glasses: $723. "How much with my big HMO discount," I asked.

"That's with the discount," I was told.

I called HearX to learn what hearing aids already on sale would cost me with my "deep Advantage allowance." Four calls later and I still hadn't received a straight answer.

Then Carolyn was diagnosed with bone cancer. All her doctors advised that she get treatment — covered by Medicare — at the Moffitt Cancer Center. What Mayo is to Rochester, what the Cleveland Clinic is to Cleveland, Moffitt is to the Tampa Bay area where we live.

But do you think our "smart investment" HMO would cover it? Hell no!

$54-Billion Bonus! For What?

Multiply our grievances times the complaints of so many of the 8.7-million seniors now insured by private Medicare Advantage HMOs, and you see why Congress is under pressure to scrutinize the annual $75-billion taxpayers pay these private insurance companies for treating us so dishonorably.

Just today, my local paper reported about a woman who found herself in an Advantage program she neither wanted nor requested. Repeated calls to disenroll went unheeded. Then, in April she broke her hip. Now, neither the HMO nor Medicare will pay the $30,000 tab.

She's not alone. Eager for a piece of the $54-billion subsidy taxpayers will give Advantage programs as a bonus over the next four years just for participating, seniors everywhere have been fraudulently switched without their knowledge or consent.

Congress has also learned that hundreds of thousands of seniors were promised their "Advantage" plans wouldn't replace traditional Medicare, that they could stay with their own doctors, and that the plans would require no co-pays. [See below.]

All lies.

And what's the bonus for? Lying to us? Nickel-and-diming us, occasionally to death? That $54-billion could be used to better our nation's health, not simply to better profits for private insurance companies.

Why, I wonder, if private plans are so efficient at delivering healthcare while holding down costs, do they need generous taxpayer subsidies to participate? Let's put both on a level playing field and see which provides the best care.

As I have written so often, Medicare "Advantage" is nothing but a device to kill a national treasure — Medicare — replacing it with private insurers that, as we've already seen:

1. Put profits before people. It's the law;
   
   
2. Will, in spite of bonuses to HMOs ranging from 12 percent to 50 percent more than we pay traditional Medicare, charge far more for services ranging from home health care, hospital stays and chemotherapy drugs to medical equipment;
   
   
3. Will continue to lie about and arbitrarily change coverage;
   
   
4. Will eventually "cherry pick," insuring only the healthiest of us; and
   
   
5. Do anything to continue #1 and the resulting annual windfall salaries of 10s of millions to HMO executives.

Stop Free Money to Insurance Companies

Why did Carolyn and I join one? I had to see for myself. Frankly, I couldn't believe that the Advantage programs were as dangerous to our health as Suddenly Senior readers continually reported.

Boy, was I wrong!

Washington must stop Medicare cuts and preserve our access to care by eliminating bonuses to private health insurers.

Just last night, Congress took the first step. Against strong Republican opposition, HR 3162, the "Children's Health and Medicare Protection Act of 2007," passed out of committee. This bill would expand spending on both children's health and Medicare by about $47-billion in the next five years, getting the money by equalizing payments between Medicare Advantage plans and traditional Medicare.

In other words, no more free money for "Advantaged" insurance companies!

Already, HMOs are launching a huge advertising campaign to stop the bill, much like Bill Novelli's Harry and Louise helped derail Clinton's universal health plan a decade ago. This time, fictional characters Sandi, Alvin, and Charlotte complain that cuts to the Medicare Advantage plans will cost them more and lead to disruption in care.

Congress, beholden to the HMOs for millions in legal bribes, must be told, clearly, that enough is enough. Those billions are ours — not a gift to the insurance companies — and should be used for our healthcare.

Congress must bite that bullet. You can help sharpen teeth by calling your Congressperson toll-free at (877) 331-2000, (800) 828-0498, (800) 869-3150, or (866) 699-9243. Tell them to support HR 3162.

Let's stop disadvantaging Medicare. This is our opportunity to "Just say no" to privatization, waste, and billion-dollar giveaways.

Want to Switch Back from Your Advantage Program to Medicare? Basically, you're screwed, and must suffer until the end of the year. Remember: The insurance and drug companies wrote this bill. According to the Medicare Rights Center (MRC), however, an internal memo circulated recently within the Centers for Medicare and Medicaid Services allows disenrollment if you were signed up without your consent. Grounds for disenrollment also include statements by an agent that imply the plan is a Medicare supplement or Medigap policy, statements suggesting that the plan is accepted by all Medicare providers, or statements saying that you can switch back to Medicare any time you want.

Call 1-800-Medicare. Tell them you qualify for a special enrollment period because you were misled into an unwanted plan. If you are dual-eligible, you can switch back within a month just by calling Medicare. Know, too, that a state has no obligations to pay for cost sharing for dual-eligibles enrolled in an Advantage plan. Questions? Call MRC at (800) 333-4114.