Medicare Disadvantage

By SAM URETSKY

The open enrollment period for Medicare Advantage is over, and peace has almost descended – at least by phone, and to some extent on television commercials. Former football players, unrecognizable by anyone who isn’t Medicare eligible, can take their afternoon naps, and private insurance companies can go back to editing the fine print on their contracts for another year.

And – millions of people will go on thinking that they are covered by Medicare, which is not precisely true. Medicare Advantage plans are not Medicare, they are private insurance offered by profit making corporations although they receive funds from all Medicare recipients as well as those who have their policies.

For the record, traditional Medicare is far from perfect, since it omits coverage for services that may be essential for many people. These include dental care, eyeglasses, and ambulance services. These services may be available through private plans. These limitations are similar to those on Canada’s Medicare in Canada system, although Britain’s National Health Service includes coverage for optical and dental care, and ambulances when medically necessary.

At the same time, The Peterson Center on Healthcare and KFF (Kaiser Family Foundation) maintain records of healthcare expenditures by nation, and the United States spends $11,945 per person per year, compared with $5,370 for Canada and $5,268 for the UK. They also report that in other highly developed countries, the average life expectancy was 82.7 years while the United States had an average life expectancy of 77 years.

Medicare Advantage Plans, while promising to provide extended services for the same, or less money than traditional Medicare, have two ways of increasing their income. Thom Hartmann, on the NYPAN (New York Progressive Action Network) makes the point that while Medicare pays on a fee for service basis, Medicare Advantage Plans “Advantage providers submit a summary to the federal government of the aggregate risk score of all their customers and, practically speaking, are paid in a massive lump sum.”

While Medicare is susceptible to fraud, it tends to be on a small scale. Private physicians may claim to have performed services that were not necessary, or not done at all, but it rarely gets out of hand. In contrast, the insurance companies are paid on a formula based on how ill their patients are, so that sicker patients bring in higher reimbursements. This sounds fair, except that Hartmann notes that the insurers offer as a benefit, and annual health check by a nurse or physician’s assistant. Their function is to find anything that can make the patient seem sicker than they are, even if no care is required: “Heart failure ... can be a severe and expensive condition to treat … or a barely perceptible tic on an EKG that represents little or no threat to a person for years ... Depression is similarly variable; if it lasts less than two weeks, there’s no reimbursement; if it lasts longer than two weeks, it’s called a “major depressive episode” and rapidly jacks up a risk score.”

Also, health plans use cost-sharing (deductibles, copayments, and coinsurance) as incentives for enrollees to use services efficiently and to shop for lower cost options when they do need care. That’s a euphemism for “if it’s too expensive then they won’t get the treatment even though they’re paying for the insurance.”

The insurance companies buy television time to promise dental care, eye glasses, transportation to medical appointments, and everything short of gluten free breakfast in bed – but then they’re the ones that set the point where the actual insurance kicks in and where it apples.

A Medicare Advantage plan may offer a savings as long as you don’t use it. The Peterson/KFF report states “Cost-sharing in private health insurance plans has steadily increased over time. For employer-based coverage in 2021, the average deductibles for single coverage were $2,379 for covered workers at small firms and $1,397 for covered workers in larger firms. Similarly, deductibles in non-group marketplace plans can be much higher for enrollees not eligible for cost-sharing reductions.”

In contrast, a number of surveys found that only about 44% of Americans could feel comfortable with an unexpected $1,000 expense such as an automobile accident or trip to the emergency room. The rest would rely on borrowing, possibly from family or friends, but others rely on a credit card – at high interest rates, or some other method including simply not paying the bills, which is not advisable.

The Pew Research Center published a report that noted, “Increasing share of Americans favor a single government program to provide health care coverage.” It would mean big savings for everyone excerpt the insurance companies.

Sam Uretsky is a writer and pharmacist living in Louisville, Ky. Email sdu01@outlook.com.

From The Progressive Populist, May 1, 2022

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