James Fieseher MD, FAAFP, of Dover is a recently retired primary care physician.
Medicare has been around since the 1960s and remains the most popular, most efficient and most cost-effective medical coverage program in the U.S.
Despite its cost-effectiveness, Medicare is being privatized through the so-called “Medicare Advantage Plans.” We’ve seen all those commercials telling us to enroll “for free.” What those commercials don’t tell you is that the “advantage” is entirely for the private insurance companies who are making billions of taxpayer dollars from the Medicare Trust Fund.
Some of the Medicare Advantage “insurers” are managed by private hedge funds. Every Advantage insurer is an investor of some form or another, but a company with no medical experience deciding which of your medical expenses it will cover will always put profits first.
Here are the top ten ways that privatization is taking the “care” out of Medicare.
Unlike Medicare, not all doctors who accept Medicare are available on an Advantage Plan. Only those doctors who are on that insurer’s plan.
The U.S. government subsidizes those “private insurers a fixed amount per Medicare Advantage patient” (New York Times, 4/28). So, the more seniors that enroll, the more money the insurer makes. The administrative cost for regular Medicare is around 2%. Administrative cost for private care under the Advantage program ranges from 20 to 40%.
Many private insurers defraud the Medicare system by inflating (or “upcoding”) the intensity of a patient’s health status. Since Medicare has little oversight over private Medicare insurers, it is unclear just how widespread this practice is, but whistle-blowers believe these costs taxpayers over a billion dollars. Whistle-blowers have found that private insurance administrators (often called “coders”) will exaggerate a patient’s medical status. If a doctor diagnoses a patient with obesity, the private insurer may charge the government for managing morbid obesity which is a much more serious condition and will be reimbursed by the government at a higher rate. (Bloomberg News, 4/12).
Private insurers scam the Medicare system through false diagnoses. In the same Bloomberg News report, some private insurers claim to be managing medical problems patients don’t have. This is different from the upcoding mentioned above. A patient receiving supplemental oxygen might be coded for hypoxia, when in fact the oxygen was for a less complicated problem of sleep apnea. The most infamous example is the private insurer that submitted a claim to Medicare for managing prostate cancer — in a woman. Other claims are less glaring, but these involve diagnoses that were never in the patient’s medical record.
Private insurers will employ lower-level medical staff for in home “examinations” and charge the government for physician visits. Those health professionals coming to your home are usually medical assistants, not medical providers (doctor, nurse practitioner or physician assistant). They are qualified to take your blood pressure, but not much else. These medical assistants get paid at a much lower rate than a medical provider, yet the health insurer gets reimbursed by the government at doctor rates.
Private insurers often deny needed tests and services at a higher rate than regular Medicare for the same medical condition. Private insurers get paid by the government for managing the medical condition, not for how that condition is managed. If the insurer can cut corners by denying services such as tests or medications order by the patient’s physician, nurse practitioner or physician’s assistant, they can pocket the savings. The “coder” denying those tests and medication is more likely than not to be someone without formal medical training in patient care, so the denial of care is more likely to be related to expense, rather than need. Patients on regular Medicare do not experience these same problems. (New York Times, 4/28)
Patients on Advantage plans are more likely to see delays in their medical care. Because Medicare Advantage patients are more likely to get denied needed services compared with regular Medicare patients, they must go through an appeals process which could take days to months. Those appeals are done by the hospital, the physician/nurse practitioner and patient. This causes a delay in care which could lead to medical complications. (New York Times, 4/28)
Privatizing Medicare requires more taxpayer dollars to provide oversight in preventing corporate fraud. The Bloomberg News report indicates the need for more government oversight in detecting and preventing the systemic fraud from private health insurers being reported by more and more whistle-blowers. This will mean that Medicare will now need to increase its administrative costs to investigate systemic fraud perpetrated by Medicare Advantage insurers.
Under the Direct Contracting Entities (DCE) program initiated quietly during the Trump administration, more seniors are being automatically enrolled into Advantage programs, often without their knowledge or permission. The program has been modified slightly under the Biden administration (now called REACH), but the result is the same: the U.S. is spending more tax dollars per patient to manage Medicare through private insurers than through regular Medicare.
All the efforts mentioned above that private entities are using to extract more money out of the Medicare Trust Fund are the reason for the number one way in which privatizing Medicare is taking the care out of Medicare. The Physicians for National Health Program (PNHP) predicts that Medicare will no longer be able to fund payments to hospitals after 2026.
From its inception, Medicare has managed the health of seniors more effectively and efficiently than private insurers. Corporate greed and private investor are trying to sell us on the idea that inserting a middleman between the medical system and the government would somehow save taxpayer money.
There is no business model to support that idea and for good reason, adding more layers of administration adds costs, especially in health care. Don’t let Joe Namath and William Shatner tell you otherwise. Keep Medicare the way it was designed and don’t enroll in Advantage Plans, or we will lose Medicare altogether.