From its beginning in 1965 Medicare has provided cost-efficient, readily accessible health care to seniors and people with disabilities. In 1998 seniors got the choice of enrolling in a “Medicare Advantage” plan, in which federal Medicare dollars are given to insurance companies as an annual lump sum.
As of September 2020, 308,049 New Hampshire residents received Medicare coverage and benefits — more than 22% of the state’s population, according to HealthInsurance.org
This large population is being hijacked by a privatization experiment called Medicare direct contracting. The Center for Medicare and Medical Services authorized it as a pilot program in Trump’s last year to change the way that Medicare pays for senior care. The program rests on the dubious theory that by inserting a middleman between Medicare and health providers and between providers and patients the result would somehow be reduced costs and improved care.
This plan had no input from Medicare enrollees and was never voted on by Congress. Nonetheless, up to 30 million traditional Medicare members are now being assigned to Direct care entities (DCEs) without their awareness or approval. DCEs will receive an annual amount of money in advance and will limit their members’ choice of providers to their own panel.
Any for-profit organization can become a DCE. While health insurance companies will certainly be a part of this system, no health care experience is required. Wall Street private equity firms, smelling a federal windfall, are applying to be DCEs.
Direct contracting would allow health care providers (Direct contracting entities: your doctors and hospitals) to accept either full or partial payment for a defined set of Medicare-covered services. The DCEs would be fully in charge of determining how they would pay their affiliated providers to cover some or all of each senior’s medical expenses, allowing DCEs to keep as profit what they don’t spend on care.
Our national experience with private interests and public health has not been good, as seen with the tobacco industry and Big Pharma. What should be different with private investors and direct contracting?
By some estimates, the DCEsmay spend as little as 60% of their Medicare payments on patient care, keeping the other 40% as profit and overhead. By contrast, traditional Medicare spends 98% of its funds on care.
A concerned doctor bluntly stated, “Medicare was designed as a lifeline for America’s seniors and those with disabilities, not a playground for Wall Street investors.”
New Hampshire seniors in traditional Medicare beware. Under Medicare direct contracting, you may be automatically “aligned” with a DCE without your full knowledge or consent. The only way out is to change your primary care physician. For me, that would be a complicated, if not impossible task.
Concerned? Join me in telling our Congressional delegation to block Medicare direct contracting.
(Kent Hackmann lives in Andover.)