Dr Jane Katz Field: Seniors, Beware of This Medicare Poison Pill

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This commentary is from Jane Katz Field, MD, a retired pediatrician who practiced in Brattleboro. She is the Vermont Chapter Physician Vice President for a National Health Program. She lives in Putney.

The annual Medicare enrollment period begins October 15, which means people over 65 will be inundated with advertisements encouraging them to enroll in what’s called “Medicare Advantage.”

Although Medicare Advantage (also known as Medicare “Part C”) appears to be part of traditional non-profit health insurance, it is in fact operated by for-profit commercial insurance companies who, with the help of deceptive marketers and celebrities like Joe Namath, signed up for 40% of senior Americans.

Medicare Advantage is different from traditional Medicare in several important ways. Traditional Medicare uses a transparent and straightforward “fee-for-service” system to pay clinicians and hospitals for patient care. However, under Medicare Advantage, the government pays commercial insurance companies a fixed monthly amount for each subscriber, allowing insurers to keep as profit what they do not pay for care.

Medicare Advantage plans tempt enrollees with low monthly premiums and some perks, such as routine vision, hearing, limited dental coverage, and gym memberships. But those low initial premiums mask the hidden costs that arise when you really need care.

If you are lucky and stay healthy, you can initially save money with Medicare Advantage, as you won’t need to purchase what is called “top-up coverage,” which covers the costs. gaps in traditional health insurance.

But, for Medicare Advantage recipients, when you get sick you find that the insurer’s “network” does not include the specialist you need to see, so you either have to go without care or pay out of pocket. . Then the plan could refuse to allow the tests and procedures your doctors order and impose high co-payments for treatments and deductibles for prescription drugs, which run into the thousands of dollars a year.

Traditional health insurance imposes some costs, such as a 20% coinsurance, but most registrants cover them by purchasing an additional “Medigap” plan for about $ 2,000 per year. By comparison, the average disbursements for Medicare Advantage members in 2021 were $ 5,000 for “network” services and nearly $ 10,000 for “off-network” services not covered by the insurer.

In addition to imposing enormous costs for the treatment of complex health conditions, Medicare Advantage plans generate benefits by selectively recruiting healthy, low-cost (and therefore profitable) patients, while repelling unhealthy patients. and unprofitable towards traditional health insurance, which must cover everyone.

They throw in flashy perks like gym memberships or even free sneakers, knowing that the new sneakers aren’t very useful for people with chronic or disabling health conditions. And then, they force cancer patients to pay up to 20% of the cost of chemotherapy, which is tens of thousands of dollars a year.

Perhaps most shocking is how Medicare Advantage plans avoid paying for expensive end-of-life care. As a result, Medicare Advantage members in their last year of life disproportionately leave these plans to enroll in traditional Medicare so as not to bankrupt their families as they die. But when Medicare Advantage members revert to traditional Medicare, there is no guarantee that they will be accepted for an additional Medigap plan.

Medicare Advantage plans also make money by “up-coding” aggressively, which means they embellish diagnostic codes to exaggerate how sick a patient really is. The overcoding inflates the results of insurers because the government pays Medicare Advantage plans a flat rate based on the severity of enrollees’ health problems. For example, if a kidney test is only slightly abnormal, Medicare Advantage plans will get more money coding it as “kidney failure” – a complex and potentially fatal diagnosis.

Due to widespread overcoding, taxpayers pay Medicare Advantage plans 4% more than the cost of care under traditional Medicare.

Despite how much Medicare Advantage plans limit patient choice and access to care, they do not save taxpayers money. In 2019, the federal government spent $ 321 more per person on Medicare Advantage registrants than it would have if those registrants had traditional Medicare.

Commercial insurers have had enough time to prove they can improve care and reduce costs, and they have both failed. The only way to achieve these goals is to eliminate the waste and profits of commercial insurers and switch to a Medicare for All system, which would save hundreds of billions of dollars a year while covering everyone from all ages for all medically necessary care.


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