Executive Summary, Medicare Advantage

Youth produces many lessons aside from those learned in the academic areas. One, as one recalls.is "that one doesn't get somethin for nuthin". Another was "Fool me once, shame on you, but fool me twice, shame on me". The Bush administration has a multitude of tricks which aptly illustrate that these old doggerels were on point.

The retirees, the elderly, are constantly bombarded with misinformation indicating that the American corporatocracy is doing something beneficial for the individual, when just the opposite is true. The New York Times on July 31 indicated that the health insurer, Humana, Inc. had doubled its second quarter profit, as opposed to a year ago. Revenue rose 19 percent, to $6.43 billion, compared with $5.41 billion a year ago, while premium and administrative service fees were up 18%, mainly driven by higher average Medicare Membership.

In reviewing the Humana Advantage Plans, of which there are three available, one notes that monthly premium plans range from $0.00-$82.00, annual deductibles are $0.00 dollars, and Maximum Medical Out-of Pocket (yearly) ranges from $5000 to $6000. One must note that to participate in all Medicare Advantage Plans that the subscriber must assign the Medicare Part B, currently $93.50 monthly deducted from ones Social Security, to the Advantage Plan carrier.

Of course, this is not merely an economic issue. Quality of care, in programs run by insurance companies, which are motivated by profit for their executives and stock holders, might well become a problem for the subscriber. For example in late July 2007, the July 27 The Alliance For Retired Americans Action Alert, noted that actions in Florida show why MA reform is needed. More than 11,000 beneficiaries of a MA plan offered by America's Health Choice, Inc., of Vero Beach, learned that the government terminated their private plan due to deficient quality of care. They will have 90 days to rejoin traditional medicare or choose a different private plan.

Let us then see where the MA plans originated as well as how they are administered and in doing so we must consider the so-called Medicare Prescription Drug Law. The older citizens remember medical care when the practice of medicine was a profession, and not an insurance company dominated business and before the days that doctors resorted to tasteless adds in the yellow pages and hospitals advertised on TV. Perhaps a bit of reality will illuminate what the present advertising deluge is really about.

The Advantage Plan Concept

In 2003, the Republican Congress passed the "Medicare Modernization Act" which created a new Part D prescription drug benefit and included provisions to increase the roll of private plans-now known as "Medicare Advantage" plans--in providing hospital, physician and other health care services. These private managed care plans were originally allowed to offer Medicare benefits because they were supposed to save money.

Now, as The E-Activist Network points out.the non-partisan MedPAC and Congressional Budget Office have found that private plans are paid on average, 12% more than traditional Medicare pays to treat the same retirees. That amounts to $150 billion over the next decade of our tax dollars going to private insurance companies.

The above report, as noted by Families USA, July 18, 2007, takes a closer look as how M.A. has evolved over the years and addresses the following issues;

1. Medicare Advantage plans are heavily subsidized, to the tune of billions of dollars per year, and these dollars come out of the pockets of Medicare beneficiaries and taxpayers.

2.Four out of five beneficiaries remain in traditional medicare, but Medicare Advantage enrollment has grown substantially since 2003.

S.The "better benefits" promised by M.A. enrollees may not be as good as promised.

President Bush has been in the forefront of encouraging senior citizens to join these plans. However, his encouragement is going to add to further rapid depletion of the Medicare Trust Fund, which in the foreseeable future will reduce Medicare benefits to those registered in the plans and those in traditional Medicare. The sole beneficiaries in the long run will be the insurance industry. In the meanwhile those on Social Security will watch their Medicare Part B deductions increase yearly.

Recently Patricia Neuman , ScD of the Kaiser Family Foundation, testified before a House Committee on Medicare. Among the items pointed out, in extended testimony, she points out that M.A. enrollment is concentrated among a small number of firms: United Health, Humana, Blue Cross/Blue Shield affiliates, and Kaiser Permanente.

That M.A. plans tend to enroll individuals with better health histories, and avoid many individuals with chronic illness or ongoing disability.

Beneficiaries may be attracted to M.A. plans by the promise of additional benefits and lower cost-sharing, but beneficiaries are not always better off in M.A. plans than in traditional Medicare. M.A. plans may waive deductibles, reduce cost-sharing requirements, offer a stop-loss limit on catastrophic spending for services
covered under Parts A and B and provide some additional benefits such as vision and dental. On the other hand, many M.A. plans impose daily hospital copayments, daily copayments for home health visits, and daily copayments for the first several days in a skilled nursing facility.

For instance Dr. Neuman sites two plans that require co-payments for hospital care, one at $124/day and the other at $275/day.

Other consideration are the fact that many plans have their own panel of physicians, thus abrogating individual choice. Others provide their own list of consultants, hospitals, and a contract clause limiting the subscriber to using facilities within a certain geographic area. Many require referral from ones primary care physician to see a specialist. The author had first hand experience several years ago when enrolled in such a plan which would not cover care at the Cleveland Clinic or Sloan-Kettering).

Before abandoning traditional Medicare coverage one should sit down with their accountant, physician, or someone with a knowledge of finances and compare the various M.A. plans, Medicare plus various supplements including Blue Cross/Blue Shield or AARP. A wise choice is important as regards ones future medical care and the continued existence of the Medicare System. Television ads and glossy advertisements are for the uninformed. One should always remember that a "non­profit" institution is not a quasi-charatable institution. It is a business without stock­holders with certain tax advantages, but with the right to pay its executives a "reasonable salary".

The Prescription Drug, Improvement and Modernization Act of 2003

To review this scurrilous , deceptive bit of legislation, which was passed by The House of Representatives by a single vote, in the middle of the night. One must recall as well that many of the congressional sponsors of the legislation have been rewarded by fine positions in the pharmaceutical industry.

To review the coverage as of 2006, per the web-site of the AFL/CIO,

If your prescription The maximum you pay is While Medicare pays
drug costs are......

up to $250 $250 (your deductible) 0
$251-$2250 $500 up to $1500

$2251-$5100 $2850 (the donut hole

coverage gap) 0

More than $5101 of cost 95% of cost

Remember, as well, the subscriber must pay his "plan" a membership fee of #25-$50 per month.

For "cooperating" the pharmaceutical companies receive $139 billion of tax-payer money over the next 10 years. The insurance companies will receive $20 billion over the next 1o years.

The federal government is forbidden under the law from negotiating with the pharmaceutical companies to reduce drug prices. Importation of drugs from abroad are forbidden (neglecting the fact that many of the drugs sold in the United States are produced abroad in the first place), There are no guarantees that the HMD or pharmaceutical companies must provide the specific drug ordered by ones physician.

The pharmaceutical companies are not subject to any type of cost control and the HMO, or insurance company, may re-negotiate membership fees on a yearly basis.

It should be remembered that the pharmaceutical manufactures have one of the three largest lobbying groups in Washington. It behooves any voter to be aware of who the donors are to the specific elected representatives in his district.

Boutique Medicine

A brief word regarding the latest fad in medical care. This is a movement largely sponsored by MDVIP, an organization largely administered by executives with a business background, to limit a physician members practice to 600 individuals. The idea is to provide the doctor with more time with each patient, avoid waiting for appointments, have an office schedule that runs efficiently, and provide a yearly "comprehensive physical examination".