Imagine that people have a choice of health plans that offer more benefits for the same premium, but the government decides it wants to undermine the plans because it hates that they are run by private companies.
That is happening big time right now with the popular Medicare Advantage (MA) plans. Example:
John Goodman explains in his latest column for Forbes:
When does the failure to answer a phone call in 8 seconds cost the company receiving the call $190 million? When the caller is a spy working for the agency that runs Medicare and the receiving entity is a private insurance company.
CMS hires “secret shoppers” to place artificial calls to see if its rules are being followed. On 63 straight calls, the insurer Elevance Health (formerly Anthem) passed inspection. But the 64th call was not answered at all.
Elevance Health claims that last call was never received. Nonetheless, it caused the company to be given a lower “star” rating – a quality measure that affects how much MA plans get paid. That one missed call cost Elevance Health $190 million.
Imagine if the IRS had to meet that same consumer response test…
Jim Capretta of AEI writes about criticisms that the government overpays these private MA plans relative to fee-for-service (FFS) Medicare.
Based on media reporting on these assessments, it would be understandable to conclude that FFS is a less expensive platform than MA. The reality is different, however…
MA plans cost less than FFS on a per-person basis when controlling for what is being compared.
The extra payments MA plans receive go mainly toward providing added benefits not covered by traditional Medicare, via lower deductibles and cost-sharing, along with payments for dental, vision, and other care that fall outside of the program’s statutory requirements. For benefits required by Medicare law, MA plans cost less than FFS, not more.
Half of all seniors enrolled in Medicare are voluntarily selecting private Medicare Advantage plans.
Liberals, who despise having any private players in the health sector, want to restrict the options for seniors to pick more generous MA coverage, with the added benefits that they get often at no additional premium.
Good luck trying to sell that politically.
Bob Moffit of Heritage writes about the latest conflict over the Medicare Advantage issue during a meeting of the commission that advises Congress on Medicare payment, MedPAC. “Beware of Bureaucratic Threats to Medicare Advantage.” Commissioner Brian Miller, MD, bravely called out the staff for not providing balance on Medicare Advantage in its latest report.
Our side has better ideas. In the latest example, Joe Albanese of the Paragon Health Institute has a major paper with important recommendations, “Improving Medicare Through Medicare Advantage.”
Politicians usually avoid proposing changes to Medicare in an election year, but the program’s rising costs and expected insolvency within the next five to 10 years will demand attention in the next presidential term…
MA enrollees tend to have more preventive care visits, fewer hospital admissions with shorter stays, and lower healthcare spending. Since MA plans deliver better health outcomes and more coordinated care, their average cost of covering core Medicare benefits is much lower — about 17% below traditional Medicare.
Joe’s paper recommends policies that could save $250 billion over 10 years, improve MA coverage, and address the issues of MA and fee-for-service parity.
For a program that is on track to bankruptcy, it’s essential to build on what works—not retreat to a payment structure built for 1965—and continue to provide seniors more choices in a market that is competing to provide better benefits and better care.
