Commentary

John Steen: Medicare Advantage is a disadvantage

This commentary is by John Steen of South Burlington, who, before he retired, was a teacher of philosophy, had a 20-year career in health planning, health regulation and public health, was a professor of health policy, and is immediate past president of the American Health Planning Association.

I am responding to a commentary in Digger Oct. 21, one that I feel the need to address out of my commitments as an educator and from knowledge I’ve acquired in more than a half-century of work in health policy, including community health planning, state health regulation and public health. 

I acquired a license as a health insurance agent in New Jersey in 1992 in order to better understand insurance from a consumer/patient perspective.

Medicare Advantage plans are private insurance plans that replace traditional Medicare coverage. Medicare coverage includes virtually all physicians and hospitals in the U.S., but Medicare Advantage offers only restricted provider panels. 

A consumer’s primary care physician may be in that panel, but the consumer may develop problems that are best handled by physicians and facilities that are out of network, with the result that the consumer will be hit with hefty fees. 

This is even more important when it comes to emergency care. A Medicare Advantage subscriber who has an emergency and is taken to an emergency room may be treated by an out-of-network physician, and receive a bill from that physician.

If a Medicare Advantage patient is in a nursing home or rehab facility, utilization review nurses at that patient’s Medicare Advantage plan — not the patient's treating physicians — will make the ultimate decisions as to whether nursing care is medically necessary. The post-hospitalization facility available to consumers is likely to be the one with the worst reputation. Prescriptions may cost more too. 

Consumers need to know that health insurers make most of their profits by denying or reducing effective coverage, and they do that mostly by establishing networks. Traditional Medicare has no networks.  

The greatest risk to consumers is that some private plans may not be financially stable and may suddenly cease coverage, leaving consumers unprotected. What a reasonable person should conclude from this is that it is fraudulent to permit private health insurance to use the name Medicare for any of its profit-making plans. Medicare is held in such high regard that private companies feel the need to steal its brand. As the saying goes, hypocrisy is the tribute that vice pays to virtue.

What most aggrieves me is how Congress provides extra taxpayer funding as subsidies to private health insurance companies in order to encourage them to seduce Medicare beneficiaries into giving up traditional Medicare. Those bonuses are costing Medicare — that is, taxpayers — billions of dollars every year. Health insurers use that taxpayer funding to offer teaser benefits to consumers. 

Almost all seniors have gotten a piece of mail that looks like a notice from the IRS. The flyer is headlined “Medicare Notice” and “Please call to confirm your eligibility.” But not for Medicare: for Medicare Advantage. In tiny print in the lower right hand corner is this: “Medicare has neither reviewed nor endorsed the information contained in this advertisement.”

You’ve probably seen the Medicare Advantage marketing commercials with Joe Namath, but have you asked yourself why insurance companies are paying to advertise their “benefits” to consumers? Their commercials are labeled "Medicare Coverage Helpline" and they include some tiny print that is purposely made too small to read on your TV screen. What it says is, “The Medicare Coverage Helpline is a private, for-profit lead generation campaign and does not offer insurance and is not an insurance agency or broker.  Your call is sold to a licensed insurance agent….” 

Medicare Advantage is so appealing to the health care industry that more not-for-profit providers are taking advantage of the profits available to them. Our TV news programs now come with commercials from the likes of UVM Medical Center and BlueCross BlueShield of Vermont touting their own Medicare Advantage plans. 

It has long been the aim of conservatives to privatize Medicare or convert it into a "premium support" program. The government would provide the Medicare beneficiary with the equivalent of a voucher — the premium support: a defined amount of funds that would be combined with the beneficiary's own funds to purchase a plan from a market of private Medicare Advantage plans. 

This would convert Medicare from the traditional defined benefit health program into a defined contribution. The government would limit its health care spending to the defined contribution while passing the risk of increasing health care costs onto the beneficiaries — to you, the consumer. 

We are already largely there. Currently, we are observing employer and union-sponsored plans being moved into the Medicare Advantage market, funded through defined-contribution HRA accounts, shifting more of the cost of health care to workers while relieving the very wealthy of their moral obligation to return some of their excess wealth. 

We have watched the private insurance industry take over significant portions of health care delivery. Let us prevent them from taking over our public health insurance too. 

The essential virtue of Medicare is that it is an entitlement that cannot be bought. It is very clear that the advantage in Medicare Advantage is to the insurance industry and Wall Street. The Medicare for All legislation supported by Sen. Sanders and Rep. Welch may be the only way we have to preserve traditional Medicare.


Commentary

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