Today we’re tackling Medicare Advantage, which is the option Medicare enrollees have to use a private insurance company to administer their Medicare benefits instead of the traditional public Medicare program. Almost HALF of all Medicare beneficiaries are now enrolled in Advantage plans, which represents a historic level of privatization of the almost 60-year program.
Just this weekend, the New York Times published a blockbuster front-page report on everything that is wrong about Advantage plans. We’ll get into all of that with our guest, Dr. Susan Rogers. Dr. Rogers spent most of her career at Stroger Hospital of Cook County (fka Cook County Hospital, the basis for blockbuster TV drama “ER”) where she was a Primary Care Physician in a neighborhood clinic before becoming a hospitalist and Director of Medical Student Programs for the Department of Medicine. She is a past co-president of Health Care for All Illinois. She retired in 2014, and is now president of Physicians for a National Health Program (PNHP), a national organization of over 25,000 physicians and health professionals whose mission is to advocate for Single Payer Healthcare/Medicare for All.
Dr. Rogers tells us her advocacy for Medicare for All grew from her experience training and working at a large public safety net hospital where providers and patients made decisions about care based on need, not ability to pay. It was the best way to learn to provide care, and the best way for patients to receive care.
What’s the difference between Medicare and Medicare Advantage?
We dig into Medicare Advantage (aka Medicare Part C) plans, and how they differ from the traditional public Medicare program. Traditional Medicare is funded by payroll taxes. Hospital coverage (Part A) is free for eligible people. There are no networks. It’s a fee-for-service plan, so providers are paid for each service they provide that’s medically necessary.
The narrative began in the 1980’s that fee-for-service was responsible for “overuse” of healthcare services. (To paraphrase Minnesota single payer hero Senator John Marty: as if people go get an extra colonoscopy just because it’s paid for.) The solution was to put private insurance between the doctor and patient to prevent overuse.
Medicare Advantage evolved from the introduction of private insurance into the Medicare system, resulting in every insurance company in America skimming massive profits off the top of a taxpayer funded federal program, while providing no actual care.
Medicare Advantage plans are required to cover all medically necessary care, but the definition of medically necessary is defined by the insurance company based on cost, not by the physician based on medical expertise. Medicare Advantage replaces the doctor/patient relationship with someone in an insurance company office – potentially with no healthcare training – deciding what’s medically necessary.
Gillian shares some stories from Healthcare-NOW members who have been enrolled in Medicare Advantage plans. Common themes were delays in care, denial of coverage, limited networks, and limited pharmaceutical formularies. These features (not bugs) of Medicare Advantage can lead to serious, even deadly deterioration of a patient’s health. We also heard stories of patients in need of specialty care for conditions like cancer, but few of the large academic centers or cancer institutes accept Medicare Advantage plans.
The overhead cost to run traditional Medicare is about 2%. That means approximately 98% of the money in the traditional Medicare pot goes to providing care to enrollees. By law, Medicare Advantage plans only have to spend 85% of their pot on patient care, and they can keep the other 15% (this is how they afford huge executive salaries, among other “overhead.”) They make that 15% slice of the pie more profitable by delaying and denying care as well as by fraudulently overcharging the federal government.
Typically many people are happy with their Medicare Advantage plans until they get sick and require more costly care, when the constant struggle to get care covered begins.
About half of Americans eligible for Medicare choose a Medicare Advantage plan, primarily for the lower premiums. We aren’t shaming anyone for making that choice. (We are shaming the insurance companies for their deliberate lack of transparency and their profit-grubbing ways.) It makes sense if you are a relatively healthy person who doesn’t need a lot of specialist care or expensive drugs. The problem arises when a person’s health status changes, and there’s no way to know when that will happen (except that it’s a good bet that the older we get, the more care we’ll need.)
What would happen if we abolished Medicare Advantage in favor of traditional Medicare?
Dr. Rogers thinks enrollees would be pleasantly surprised by the ability to get care where they want to, and not have to fight for everything they need. She doesn’t predict a huge influx of people who will suddenly show up seeking care just because it’s covered. There will be more people seeking necessary care that they weren’t able to afford under a Medicare Advantage plan.
Ending the privatization of Medicare is key for the movement for Medicare for All. It’s the first step in getting the profit motive out of healthcare decisions. Physicians will be able to provide care they way they were taught in medical school. So much of “physician burnout” is actually the logistical, moral and ethical burden of trying to provide care in a profit driven system that devalues their medical expertise.