Senator Cindy Rosenwald claims in her guest editorial yesterday that “Medicare Advantage plans improve health equity for NH seniors”. Unfortunately, the reality is that Medicare Advantage plans represent a colossal rip-off of the Medicare Trust Fund and an enormous wind-fall for private insurance companies! In addition, Medicare Advantage plans represent an underhanded way to privatize Medicare.
The administrative overhead cost of Traditional Medicare is approximately 2% of the total cost of Medicare, which means that 98% of the funds go to direct medical care. In comparison, under Medicare Advantage plans the administrative costs are in the 15-20% range (and can be as high as 40%). Thus, only 60-80% of the funds go to actual medical benefits. These excessive profits are generated by cherrypicking healthier seniors on initial enrollment, limiting provider networks, regularly up-coding diagnoses to generate more charges, and disenrollment of sicker beneficiaries (“lemon-dropping”). Also, Medicare Advantage plans are notorious for regularly denying care through prior authorization, even when that care is routinely covered under Traditional Medicare. Several companies have been fined and agreed to large settlements due to these violations. In 2019 total Medicare spending was $330 billion, but it is projected that by 2025 Medicare Advantage plans could potentially collect up to $660 billion from the Medicare Trust Fund.
The organization titled Physicians for a National Health Program (PNHP) is leading an effort urging CMC to terminate the Medicare Advantage Program. For seniors and people who would like to see more benefits that are promised—but often not delivered—by Medicare Advantage plans, please lobby your representatives and elected officials to improve Traditional Medicare. Improving Traditional Medicare is much more efficient and cost effective than trying to indirectly offer these improvements through private plans at much higher costs.
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