Monday, August 24, 2009
Barry / The Economy Medicare Disadvantage
Posted by Bruce Barry on Mon, Aug 24, 2009 at 2:33 PM
The story describes the subsidies that keep Advantage plans in business but neglects to emphasize that these plans, and the companies (like HealthSpring) that peddle and profit from them, contribute to the government's health care financing woes by taking taxpayer money to provide Medicare benefits at higher costs than necessary. A new analysis of Medicare financing by the respected Kaiser Family Foundation calls the upside of Medicare Advantage plans "a matter of dispute" but concludes that "it is undisputed that Medicare Advantage payments have added to the cost of Medicare borne by the government." Although the AARP doesn't support doing away with Advantage plans entirely, the organization's head does agree that Medicare Advantage insurers "are being paid too much."
The CP story finds HealthSpring CEO Herb Fritch fretting that reform "could put the whole Medicate Advantage industry in peril." That sounds like a fine idea. As The New York Times aptly editorialized a couple of years ago, "If private health plans are supposedly so great at delivering high-quality care while holding down costs, why does the government have to keep subsidizing them so lavishly to participate in the Medicare program?" Good question.
Comments (7)
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The CP story, juxtaposed with this post, is a perfect example of why many of us fear the new regime of communications "products" from Southcomm.
Will anyone be out there to poke holes in shallow corporatist "reporting" when the Scene goes away?
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I have heard first hand horror stories here in my hometown about Medicare Advantage plans. What bothers me is that AARP won't come down hard on them. But guess what, AARP sells Advantage Plans. Go figure.
yousaidit says:
The CP story, juxtaposed with this post, is a perfect example of why many of us fear the new regime of communications "products" from Southcomm.
Will anyone be out there to poke holes in shallow corporatist "reporting" when the Scene goes away?
Um, I think Bruce just did, and that's just what we hope keeps happening.
My colleague Walker (who wrote that piece as his swan song -- he's off to academia for a few years) turned it as a cover story for the NashvillePost.com print edition within the CP. That edition mainly covers business news. Walker's piece covered the potential impact of reform on HS as a business story. No question there are other dimensions to that story, just perhaps no others that could have been adequately explored in the print space available for a business story.
But whether one likes Walker's piece or not, I'm glad that it is subject to a well-thought-out critique by a public intellectual like Bruce. I don't think it's essential to public discourse that one company own the platforms where Bruce and Walker have both published, but I do think it's good for the community to have each of them addressing an issue in different ways. One company happens to be making that exchange possible now, for whatever that is worth.
I wasn't aware that Walker Duncan is casting off for academia. Why on earth would anyone would want to waste time there?
"If private health plans are supposedly so great at delivering high-quality care while holding down costs, why does the government have to keep subsidizing them so lavishly to participate in the Medicare program?" Good question."
Medicare itself hasn't been holding down costs - it (along with Medicaid) has instead been shifting it's costs off onto private insurance.
http://blog.heritage.org/2009/07/30/the-medicare-cost-control-myth/
oldwoman2 says: I have heard first hand horror stories here in my hometown about Medicare Advantage plans. What bothers me is that AARP won't come down hard on them. But guess what, AARP sells Advantage Plans. Go figure.
First, AARP doesn't sell insurance. They do, however, endorse providers and probably receive a fee from the providers when a plan is purchased.
Second, anecdotal "horror stories" usually are the result of unscrupulous sales tactics of the agents not the MA plan itself. CMS has come down hard on MA plans' oversight of agents and the reports of misdeeds are dramatically lower.
Finally, MA plans' main differences from traditional Medicare involves the cost of benefits cap MA plans provide and the additional benefits traditional medicare does not offer. MA plans receive a fixed fee (premium) from Medicare each month and in return accept the full cost of a participant's treatment regardless of how much it is.
"First, AARP doesn't sell insurance. They do, however, endorse providers and probably receive a fee from the providers when a plan is purchased."
There's no probably about it.
AARP does indeed get fees for steering the old folks into all sorts of products and services - insurance included.
