Googly Moogly
Expert
- 79
Advantage, insurance companies
As a candidate, President-elect Barack Obama singled out the elimination of Medicare Advantage subsidies as one of the ways his administration would economize. Now, new studies reinforce the waste associated with those payments, leaving little reason to continue the program.
Under Medicare Advantage, the government pays private health insurers substantially more to cover clients' health care costs than what the government spends under traditional Medicare to directly pay doctors and hospitals. On average, the Advantage plans cost 13 percent more, and about a quarter of the nation's 44-million Medicare beneficiaries currently subscribe to one.
The popularity of these plans is linked to heavy advertising and enticements such as added vision coverage or gym memberships. In 2003, a Republican-led Congress increased payments to Advantage plan providers. Since then, billions of dollars have been directed into private sector profits that could have been spent on direct care for Medicare beneficiaries.
The increased costs were supposed to be justified by market efficiencies and improved health for recipients that ostensibly would come from private competition and increased enrollment in health maintenance organizations. But a new analysis by Marsha Gold at Mathematica Policy Research Inc. and posted on the Web site Health Affairs, says that there are no apparent gains in the quality of care in the Advantage plans. Plus, additional spending for Advantage plans continues to reduce the solvency of the Medicare trust fund. It is estimated that added Advantage costs subtracts 18 months from the life of the fund, which is currently projected to run out of money by about 2019.
Beyond taxpayers, the added costs are also borne by the current enrollees in traditional Medicare whose monthly premiums increased by an estimated $3 to pay for the Advantage subsidies, according to research by members of the Medicare Payment Advisory Commission, an independent congressional agency.
It is no surprise that the Advantage plans' primary beneficiaries are the insurance companies that offer them. According to Bloomberg.com, three large health insurance companies, including WellCare Health Plans Inc. of Tampa, attribute more than 80 percent of their earnings to the receipts from Medicare Advantage.
Talk about counterproductive. Scarce Medicare dollars are bolstering the bottom lines of middlemen instead of paying for health care for elderly and disabled Americans. The Obama administration and congressional Democrats should move quickly to reduce Medicare Advantage premium payments and eventually eliminate them. If the private sector wants to compete with government, then it should do so without a taxpayer-funded bonus.
As a candidate, President-elect Barack Obama singled out the elimination of Medicare Advantage subsidies as one of the ways his administration would economize. Now, new studies reinforce the waste associated with those payments, leaving little reason to continue the program.
Under Medicare Advantage, the government pays private health insurers substantially more to cover clients' health care costs than what the government spends under traditional Medicare to directly pay doctors and hospitals. On average, the Advantage plans cost 13 percent more, and about a quarter of the nation's 44-million Medicare beneficiaries currently subscribe to one.
The popularity of these plans is linked to heavy advertising and enticements such as added vision coverage or gym memberships. In 2003, a Republican-led Congress increased payments to Advantage plan providers. Since then, billions of dollars have been directed into private sector profits that could have been spent on direct care for Medicare beneficiaries.
The increased costs were supposed to be justified by market efficiencies and improved health for recipients that ostensibly would come from private competition and increased enrollment in health maintenance organizations. But a new analysis by Marsha Gold at Mathematica Policy Research Inc. and posted on the Web site Health Affairs, says that there are no apparent gains in the quality of care in the Advantage plans. Plus, additional spending for Advantage plans continues to reduce the solvency of the Medicare trust fund. It is estimated that added Advantage costs subtracts 18 months from the life of the fund, which is currently projected to run out of money by about 2019.
Beyond taxpayers, the added costs are also borne by the current enrollees in traditional Medicare whose monthly premiums increased by an estimated $3 to pay for the Advantage subsidies, according to research by members of the Medicare Payment Advisory Commission, an independent congressional agency.
It is no surprise that the Advantage plans' primary beneficiaries are the insurance companies that offer them. According to Bloomberg.com, three large health insurance companies, including WellCare Health Plans Inc. of Tampa, attribute more than 80 percent of their earnings to the receipts from Medicare Advantage.
Talk about counterproductive. Scarce Medicare dollars are bolstering the bottom lines of middlemen instead of paying for health care for elderly and disabled Americans. The Obama administration and congressional Democrats should move quickly to reduce Medicare Advantage premium payments and eventually eliminate them. If the private sector wants to compete with government, then it should do so without a taxpayer-funded bonus.
