I read this stuff so you don’t have to, for which I will expect massive offerings of spinach pies and stuffed grape leaves at some point in the future. Anyway, since none of the progressive or liberal health policy wonks seem so inclined, I’ve now waded through the entire Baucus white paper and most of the Senate Finance Committee hearings on this health care kerfuffle.
I’m planning to inflict on y’all, in the near future, my acerbic [or otherwise] comments on the whole thing, though I’ll try to keep it cut up into manageable chunks. I was going to go through the points in the Call To Action in order, from front back, but because I
wasted spent yesterday evening hunting down JindalCare instead, for now I’m just going to skip to page 76 and say a few things about Medicare Advantage.
Medicare beneficiaries can obtain benefits through the traditional fee-for-service program or by enrolling in private insurance plans that are approved to offer Medicare benefits. Private insurance plans are paid a monthly amount by the government for each beneficiary whom they enroll. In return, insurers agree to provide coverage for the range of Medicare benefits that their enrollees need. The program allowing private insurers to serve Medicare beneficiaries is called Medicare Advantage (MA).
The Medicare Payment Advisory Commission (MedPAC) estimates that Medicare Advantage (MA) insurers are currently paid 13 percent more than the amount Medicare would pay if the same beneficiaries remained in the traditional fee-for-service program. Current estimates indicate that these excess payments will total $62 billion over the next five years, and $169 billion over the next ten years.
MedPAC has called for Medicare Advantage payments to be set equal to traditional Medicare. The health insurance industry defends these payments by pointing to extra benefits that low-income MA enrollees receive relative to traditional Medicare, like eyeglasses, dental coverage, and lower copayments. But delivering these extra benefits through Medicare Advantage is not as efficient as delivering them directly through traditional Medicare. Moreover, MedPAC reports that MA plans are less efficient at delivering Medicare Part A and B benefits than the traditional fee-for-service program. Private insurers’ higher overhead and added administrative costs — including profits — mean that fewer benefits are passed along to beneficiaries. CBO and the U.S. Comptroller General estimate the administrative costs of private plans serving Medicare beneficiaries are in the range of 11 to 13 percent, compared to estimates of 2 to 5 percent for the traditional Medicare program.
The majority of Medicare beneficiaries have multiple chronic conditions that could be treated more effectively through interdisciplinary care teams, and the insurance industry contends that private plans better coordinate care and improve quality oversight in the Medicare program. There is no solid evidence that supports this assertion. Not all Medicare Advantage plans are designed to integrate or coordinate care across the spectrum of providers, and not all use electronic medical records to better manage care. Even so, all Medicare Advantage payments are based on the same rates — whether or not the plan uses advanced methods of coordinating and delivering care.
The paper then goes on for several more paragraphs detailing the various tweaks we could try so as to maybe level the Medicare playing field so that the private MA insurers can compete. WTF?
We’ve now got years of Medicare Advantage data showing that the public, taxpayer-funded program works more cheaply and more efficiently than the private insurers can do this for. And we’re also starting to pile up data from various states’ [not just Florida’s] Medicaid programs, where experimentation with letting the private insurers in just makes things more expensive and less efficient.
So, my question here to Senator Baucus — and to Tom Daschle, John Dingell, Ted Kennedy, and anybody else who may be working on Obama’s plan — How many more of us have to be your guinea pigs before you realize that we can’t afford the insurance industry?