We need real universal coverage: enhanced Medicare for All
By Thom Hartmann for the Independent Media
Institute
My new book, The Hidden History of American Healthcare: Why Sickness Bankrupts You and Makes Others Insanely Rich is officially available in bookstores nationwide and online.
Here’s a chapter excerpt I think you’ll find interesting, particularly
after all those awful TV ads with former football and sitcom stars we’ve had to
endure the past few years…
The “Advantage” War against Medicare
Medicare Advantage is a massive, trillion-dollar
rip-off, of the federal government and of taxpayers, and of many of the people
buying the so-called Advantage plans.
It’s also one of the most effective ways that
insurance companies could try to kill Medicare For All, since about a third of
all people who think they’re on Medicare are actually on these privatized plans
instead.
Nearly from its beginning, Medicare has allowed
private companies to offer plans that essentially compete with it, but they
were an obscure corner of the market and didn’t really take off until the Bush
administration and Republicans in Congress rolled out the Medicare
Modernization Act of 2003. This was the GOP’s (and a few corporatist
Democrats’) big chance to finally privatize Medicare, albeit one bite at a
time.
That law created a brand known as Medicare
Advantage under the Medicare Part C provision, and a year later it phased in
what are known as risk-adjusted large-batch payments to insurance
companies offering Advantage plans.
Medicare Advantage plans are not Medicare.
They’re private health insurance most often offered by the big for-profit
insurance companies (although some nonprofits participate, particularly the
larger HMOs), and the rules they must live by are considerably looser than
those for Medicare.
Even more consequential, they don’t get
reimbursed directly on a person-by-person, procedure-by-procedure basis.
Instead, every year, Advantage providers submit a summary to the federal
government of the aggregate risk score of all their customers and,
practically speaking, are paid in a massive lump sum.
The higher their risk score, the larger the
payment. A plan with mostly very ill people in it will get much larger
reimbursements than a plan with mostly healthy people. After all, the former
will be costly to keep alive and healthy, while the latter won’t cost much at
all.
Profit-seeking insurance companies, being the
predators that they are, have found a number of ways to raise their risk scores
without raising their expenses. The classical strategies of tying people to
in-network providers, denying procedures routinely during first-pass
authorization attempts, and having very high out-of-pocket caps are carried
over from regular health insurance systems to keep costs low and profits high.
But with Medicare Advantage, the big insurance
companies have invented a whole new way to rip us all off while padding their
bottom lines.
For example, many Medicare Advantage plans
promote an annual home visit by a nurse or physician’s assistant as a “benefit”
of the plan. What the companies are doing, though, is trying to upcode
their customers to make them seem sicker than they are to increase their
overall Medicare reimbursement risk score.
“Heart failure,” for example, can be a severe
and expensive condition to treat . . . or a barely perceptible tic on an EKG
that represents little or no threat to a person for years or even decades.
Depression is similarly variable; if it lasts less than two weeks, there’s no
reimbursement; if it lasts longer than two weeks, it’s called a “major
depressive episode” and rapidly jacks up a risk score.
The home health visits are designed more to look
for illnesses or codings that can increase risk scores than to find
conditions that require medical intervention. They’re so profitable that an
entire industry has sprung up of companies that send nurses out on behalf of
the smaller insurance companies.
In summer 2014, the Center for Public Integrity
(CPI) published an in-depth investigative report titled Why Medicare Advantage Costs Taxpayers
Billions More Than It Should.
They found, among other things, that one of the
most common scams companies were running involved that very scoring of their
customers as being sicker than they actually were, so that their reimbursements
were way above the cost of caring for those people.
Here are a few quotes from the report:
·
“Risk scores of
Medicare Advantage patients rose sharply in plans in at least 1,000 counties
nationwide between 2007 and 2011, boosting taxpayer costs by more than $36
billion over estimated costs for caring for patients in standard Medicare.”
·
“In more than 200 of these
counties, the cost of some Medicare Advantage plans was at least 25 percent
higher than the cost of providing standard Medicare coverage.”
·
The report documents
how risk scores rose twice as fast for people who joined a Medicare Advantage
health plan as for those who didn’t.
·
Patients, the report
lays out, never know how their health is rated because neither the health plan
nor Medicare shares risk scores with them—and the process itself is so arcane
and secretive that it remains unfathomable to many health professionals.
·
“By 2009, government
officials were estimating that just over 15 percent of total Medicare Advantage
payments were inaccurate, about $12 billion that year.”
·
Based on its own sampling
of data from health plans, the report shows how CMS has estimated that faulty
risk scores triggered nearly $70 billion in what officials deemed “improper”
payments to Medicare Advantage plans from 2008 through 2013.
·
CMS decided, according
to the report, not to chase after overcharges from 2008 through 2010 even
though the agency estimated through sampling that it made more than $32 billion
in “improper” payments to Medicare Advantage plans over those three years. CMS
did not explain its reasoning.
·
The report documents
how Medicare expects to pay the health plans more than $150 billion this year
[2014, the year the study was published].
Companies are almost never nailed for these
overcharges, and when they are, they usually pay back pennies on the dollar.
For example, when the Office of Inspector
General, Health and Human Services (which oversees Medicare), audited six out
of the hundreds of plans on the market in 2007, they found that just those six
companies “had been overpaid by an estimated $650 million” for that one year. As the Center for Public Integrity states, “CMS settled five of the six audits for a total repayment
of just over $1.3 million.”
The Centers for Medicare and Medicaid Services
also, in 2012, decided to audit only 30 plans a year going forward. As CPI
noted, “At that rate, it would take CMS more than 15 years to review the
hundreds of Medicare Advantage contracts now in force.” And that’s 15 years to
audit just one year’s activity!
Things haven’t improved since that 2014
investigative report from CPI. In September 2019, Senator Sherrod Brown of Ohio
and five Democratic colleagues sent a letter to President Donald Trump’s CMS
administrator, Seema Verma.
“The recent HHS Payment Accuracy Report exposes
that taxpayers have overpaid Medicare Advantage plans more than $30 billion
dollars over the last three years,” Brown wrote.
“This report comes on the heels of a 2016 Government Accountability Office
(GAO) report and a 2013 GAO report on [Medicare Advantage] plan overcharges and
the failure of the Centers for Medicare and Medicaid (CMS) to recoup billions
of dollars of improper payments from MA plans.”
Meanwhile, during the four years of the Trump
administration, CMS went out of their way to illegally promote Medicare
Advantage plans (which typically cost CMS far more than a regular Medicare
plan).
A February 2020 report in the New York Times stated, “Under President Trump, some critics contend, the
Centers for Medicare and Medicaid Services, which administers Medicare, has
become a cheerleader for Advantage plans at the expense of original Medicare.”
The report pointed to the draft release of the
2019 Medicare & You handbook, which is mailed every year to all
enrollees and posted online. “Advocates and some lawmakers criticized language
describing Advantage as a less expensive alternative to original Medicare.”
The National Bureau of Economic Research (NBER)
compared Medicare Advantage with traditional Medicare and found the Advantage
programs to be mind-bogglingly profitable: “MA insurer revenues are 30 percent
higher than their healthcare spending. Healthcare spending for enrollees in MA
is 25 percent lower than for enrollees in [traditional Medicare] in the same
county and [with the same] risk score.”
At the same time, Medicare Advantage often
screws its customers. According to the NBER study, people with Medicare Advantage got 15 percent fewer colon
cancer screening tests, 24 percent fewer diagnostic tests, and 38 percent fewer
flu shots.
Speculation is rife as to why CMS would
allow—much less promote—privatized plans that cost Medicare far more than
original Medicare to rip off taxpayers to the tune of billions of dollars a
month.
One possibility is regulatory capture—people
working in CMS know that if they go along and get along, very well-paid jobs
are waiting for them at for-profit insurance companies after a few years of
government service. This is a chronic problem at other regulatory agencies,
particularly those overseeing pollution, pharmaceuticals, telecommunications,
and banking.
Another answer is that the Bush
administration—where Medicare Advantage started—was so enamored of the idea of
privatizing Medicare to eventually destroy the program (George W. Bush
campaigned extensively from the late 1970s through his presidency to privatize
both Social Security and Medicare) that they turned a blind eye to abuses.
The Obama administration had other priorities,
as they were trying to push through the Affordable Care Act and didn’t want to
upset the apple cart. And when Trump came into power, his folks saw anything
that drained resources out of Medicare and into the pockets of multimillionaire
health insurance executives—a group notoriously generous when it comes to
making political contributions—as a plus.
You Are Locked in to Medicare Advantage
A fellow I’d known decades ago recently bubbled
back into conversation among a few of us who’d hung out together in New York
back in the 1970s. Sam, I’ll call him, had turned 65 and hadn’t had
employer-provided health insurance in years. He spent a few hours trying to
figure out how to sign up for Medicare and then gave up, totally confused,
figuring he’d try again in a few months.
Unfortunately, his prostate intervened. When Sam
started experiencing pain urinating, he visited a local “doc in a box” urgent
care clinic, where they gave him a PSA test. The result was shocking: his PSA
was so high that it was a virtual certainty he had prostate cancer, and
possibly it had even metastasized, a situation that is the second-leading cause of cancer death in
American men.
Telling him that he’d be facing hefty doctor and
hospital bills regardless of the outcome, the urgent care clinic signed him up
for a Medicare Advantage plan offered by an affiliate that almost certainly
paid them a commission for the sign-up. Sam was excited, though, because he now
had insurance, and it was a “no dollar” plan that didn’t cost him a penny.
Sam then got on the phone to find a urologist
who specialized in cancer. He found that the best worked out of Memorial Sloan
Kettering Cancer Center in New York, and, telling them he was “on Medicare,” he
made an appointment to see one of their top docs. A month later, when his
appointment finally opened up, the person who was checking him into the system
told him that he’d have to pay cash because his Advantage plan didn’t include
Sloan Kettering.
In fact, more than a third of all
Medicare Advantage plans nationwide do not include any of the
National Cancer Institute centers, and none of the Advantage plans offered in the
New York City area include the nation’s most famous one, Memorial Sloan Kettering Cancer Center.
Shocked, Sam contacted Medicare to see if he
could transfer from Medicare Advantage to regular Medicare. This all happened
in fall 2020, so they told him that he could make the change during the “open
enrollment period” of October 15 to December 7. He made the change and called
Sloan Kettering back.
This time, they wanted to know what Medigap
policy he’d signed up for to fill in the 20 percent of billing that Medicare
doesn’t cover. That sent Sam back to the internet and, ultimately, to an
insurance agent, who told him that while Medigap plans can’t refuse you because
of preexisting conditions when you first sign up when you turn 65, if you shift
from Medicare Advantage back to traditional Medicare after that first
enrollment, particularly if you’re older or sick, they can simply refuse to
cover you.
Reporter Mark Miller wrote for the New York Times
in February 2020 about Ed Stein, a 72-year-old
man with bladder cancer and a Medicare Advantage plan that didn’t cover the
cancer docs in his area who specialized in his type of cancer. He tried to
shift back to traditional Medicare to cover what promised to be complex and
expensive surgery and chemotherapy. As Miller wrote, “That was when he ran up
against one of the least understood implications of selecting Advantage when
you enroll in Medicare: The decision is effectively irrevocable.”
As of this writing (November 2020), my friend
Sam still hasn’t seen a doctor. This is the state of healthcare in America as
it’s been sliced and diced by the multibillion-dollar insurance industry.
Meanwhile, every fall, Americans are inundated
with hundreds of millions of dollars’ worth of TV, direct mail, and internet
advertising for Medicare Advantage plans. And where does the money come from to
pay for that advertising?
It comes from the same place that provided over
$1 billion in wealth to the former CEO of United Healthcare, and over $100
million a month in compensation to senior executives in the largest health
insurance companies: denying claims while collecting risk adjustment
claims from your tax dollars and mine.
The simple solution to the Medicare Advantage
problem is to kill off the program. It was just a Trojan horse to privatize
Medicare, and its presence will make Medicare for All even harder to implement.
At the same time, the 20 percent hole that the GOP insisted on for skin in the
game with real Medicare needs to go, too.
A comprehensive Medicare for All program will
eliminate both of these problems.
Thom Hartmann
is a talk-show host and
the author of The
Hidden History of American Healthcare and
more than 30 other books in print. He is a writing fellow at the Independent Media Institute and his writings are archived at hartmannreport.com.
This article was produced by Economy for All, a project of the Independent Media
Institute.