How easy it is to scam Uncle Sam, to embed the trickery in the arcana of the bureaucracy. The Medicaid ones are legion: in “Medicaid mills” physicians treat patients they hardly examine, then bill for the services, whether or not needed, whether or not delivered. Medicare has been a minefield for stealing identities. Think of the telephone calls supposedly from “Medicare,” that ask the respondent for identification. Medicare doesn’t call enrollees; only scamsters do. New words have entered the lexicon: phishing, where scamsters ply their schemes via email, and smashing, where they text their victims.
If you can bury the scam in a Hydra-headed bureaucracy, you might win.
Of course, those scams are illegal; their perpetrators risk jail.
How wonderful, then, is Medicare Advantage. The Plans are legal, designed to save the taxpayers money, yet cost taxpayers more. A perfect scam.
In “Original” Medicare, enrollees pay a monthly premium, geared to income. (In 2022, roughly $170.) That insurance comes with deductibles (20% for a hospital stay, roughly 20% for outpatient treatment). Enrollees with sufficiently low income can qualify for subsidies, either Medicaid (no premiums or co-payments) or “qualified beneficiary” status, with discounts. Then there is Medicare Part D for medications — a different enrollment process. For Medicaid-eligible enrollees, medications (outpatient) are included. Not surprisingly, most enrollees in “Original” Medicare buy private secondary insurance (Medi-Gap) to cover the deductibles, co-payments and sometimes medications.
“Original” has no extras — no health club memberships, no deductions for dental vision, hearing care, no vouchers for trips to physicians.
Enter Medicare Advantage Plans. They are private insurance, offered through Medicare to the same enrollees. What a difference: low (or no) premiums, medications included (with sometimes much lower co-payments), and nifty extras, like health club memberships, dental care, eyeglasses. Who wouldn’t pick those?
Some 28 million Medicare-eligible enrollees, or 40% of the eligible pool, do. And they are pleased.
Until … always an “until.” Until they need a lot of medical care. When those once-pleased, once-healthy enrollees age, with the concomitant illnesses, they will face the small-print details: limitations on treatments, need for prior authorization, restricted panels of hospitals, physicians, nursing homes and rehabilitation centers. The Medicare Advantage plans hire “claims adjusters” to ratchet down the treatments covered. (The Department of Human Services found in one survey that 13% of prior authorization denials and 18%of payment denials were “improper”. (“Medicare Advantage Is a Massive Scam,” by Ryan Cooper in The American Prospect, April 29, 2022). Plus, a Medicare Advantage plan may be cemented in the state where an enrollee bought it — the grandparent who gets sick while visiting grandchildren across the country risks losing coverage.
At that point, those enrollees may want to switch, but the rules make that difficult, and expensive. From Oct. 15 to Dec. 7, Advantage Plan enrollees can switch, but they will need to buy prescription coverage, as well as a Medi-gap policy, which have underwriting rules that may prove expensive.
Who benefits? Not the elderly, who need major care.
And not the taxpayers. Uncle Sam carved out this private sector option to save money. Uncle Sam calculated the “risk pool” for Medicare Advantage enrollees, and paid the plans accordingly. The rationale was that those enrollees would be healthier, and cost less. Also, those private sector plans would be super-efficient at delivering care. Ultimately, Uncle Sam would save money by letting healthy enrollees enroll in cheaper plans.
Perhaps predictably, the private sector plans were more efficient — not at delivering care, but at making a profit. They have lured the healthiest enrollees, with glasses, health club memberships, dental care. At the same time, they have tried to upgrade the diagnoses of their risk pools, to get the highest payment from Uncle Sam. Meanwhile they have used their “prior authorization” rules, their no-travel rules, their limited networks to restrict care. Finally, their administrative costs run as high as 14%, compared to 4% for original Medicare. At the end of the accounting, Medicare Advantage plans have cost Uncle Same 3% more per enrollee than the government-run original Medicare.
Many Americans look to the entrepreneurial genius of the private sector, comparing it to a bureaucratic government. With Medicare, the bureaucratic government is the true bargain.
Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.
From The Progressive Populist, October 1, 2022
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