Big Insurers Get Big Bucks from Taxpayer-Funded Medicare, Slighting Services for Seniors

http://blog.aflcio.org/2007/12/04/big-insurers-get-big-bucks-from-taxpayer-funded-medicare-slighting-services-for-seniors/

by Mike Hall, Dec 4, 2007

The federal government is overpaying billions of dollars a year to the private insurance companies that operate Medicare Advantage plans. Those private, for-profit plans currently account for about one in five of all Medicare participants and that number could grow even larger under the Bush administration’s push to further privatize Medicare, according to the Center on Budget and Policy Priorities (CBPP).



Today, several members of the senior advocacy organization, the Alliance for Retired Americans, along with other consumer advocates, will deliver more than 48,000 hand-signed petitions from seniors around the nation calling on Congress to eliminate or reduce the billions of dollars in overpayments and to strengthen Medicare.

The Republican Congress in 2003 gave big insurance companies that provide Medicare insurance what amounts to a huge subsidy with the Medicare Advantage program. These private insurers were supposed to introduce competition into the Medicare system and reduce costs.

But as the CBPP reports:

According to the Medicare Payment Advisory Commission (MedPAC), these private plans are paid an average of 12 percent, or $1,000 per year, more to cover a Medicare beneficiary than the cost of traditional Medicare to cover the same beneficiary. Private Medicare Advantage fee-for-service plans are paid on average 19 percent more than the traditional Medicare fee-for-service program.

In addition, studies show the private insurers target younger and healthier seniors whose health care costs are less, resulting in even larger profits. There are some 35 million older and disabled Americans enrolled in regular Medicare and about 8 million in Medicare Advantage plans. Those overpayments to private firms—estimated to cost between $150 billion and $160 billion over the next 10 years—force participants in the normal Medicare program to pay higher premiums for their coverage.

Says CBPP:

any elderly and disabled beneficiaries are being charged more so that private companies can make larger profits and a much smaller number of beneficiaries can get some added benefits.

FULL story at link.