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Two recent reports on Medicare Advantage plan billing practices reveal that Medicare Advantage plans are a bad deal for taxpayers. A number of them are bilking taxpayers of billions of dollars. A new study by the Department of Health and Human Services shows that some Medicare Advantage plans are “upcoding” or, in English, charging Medicare for more costly services than they are providing. Because Medicare pays Medicare Advantage plans more to treat patients who are sicker, some of them charge Medicare as if their patients are in worse health than they actually are.
Another study by the Center on Public Integrity determined that “billing errors” by Medicare Advantage plans led the government to overpay them nearly $70 billion between 2008 and 2013. Not surprisingly, in many parts of the country, the cost of caring for people with Medicare through these private plans is as much as 25% more than traditional Medicare. Of note, a large number of Medicare Advantage plans have not succeeded at controlling Medicare spending, as many lawmakers had suggested they would when they were first created in 2003.
Here’s more from Just Care:
Older eligibility for Medicare is not wiser. Raising the Medicare eligibility age from 65 to 67 actually ends up costing twice as much as it saves according to the Kaiser Family Foundation. And, it would hurt millions of older adults who would need to wait two more years to be eligible for Medicare as well as increase costs for people with Medicare.
How would it affect you financially? It depends on where you live, where you work and how much you earn. Kaiser estimates the net increase in out-of pocket expenses for people at $3.7 billion. An estimated third of older adults would save money; however the two-thirds of older adults would be faced with greater out-of-pocket expenses.
The average increase per person would be $2,200. People who qualify for Medicaid typically would pay less. People who need to enroll in a state health exchange may pay more or less based on income and eligibility for federal help paying premiums. People covered under their employers’ plan, both actively working and retired, would typically need to pay more.
Furthermore, if 65 and 66 year-olds are not paying into Medicare, Medicare loses their premium contributions. Since they are the youngest Medicare enrollees, they help subsidize the cost of older enrollees. Without their enrollment in Medicare, premiums will also rise for everyone enrolled in Medicare. To make matters worse, if these 65 and 66 year-olds enroll in the state exchanges, as the oldest enrollees, their premiums will be the highest.How much does raising the Medicare eligibility age really help the federal budget?
By eliminating coverage of 65 and 66 year olds, it would save $31.1 billion over ten years. But overall health care spending would rise because individuals, employers and states would be spending substantially more. The net federal savings would actually only be $5.7 billion, and it would cost individuals (and their employers, and states) $11.8 billion in 2014.
Read more about this issue from the Kaiser Family Foundation here.
Raising Medicare premiums will save the government money but could hurt millions of people with Medicare.
Lawmakers are looking for ways to cut down government spending on Medicare. Many of them are proposing that more people with Medicare pay a higher monthly premium. According to the Kaiser Family Foundation, if federal law changes, many people with Medicare will pay a lot more each month for their health care.
Today, only a small percentage of people with Medicare pay higher premiums for their medical care (5 percent) and for their drug coverage (4 percent). That’s because right now, only people who earn $85,000 or more and couples who earn $170,000 or more pay higher premiums. Today, you might be surprised to know that half of all people with Medicare have incomes below $23,500 and one in four have incomes below $14,400.
If the new proposals became law, one in four people with Medicare (25 percent) would pay higher premiums for their medical care by 2036, starting at incomes of $45,600 for individuals and $91,300 for couples. The Congressional Budget Office estimates that this change would cut federal spending by $56.3 billion dollars in the next ten years starting in 2014.
Asking middle-class Americans to pay more for Medicare than they do today may mean forcing them to go without needed care. People with incomes as low as $45,600 are at risk of not being able to pay these higher premiums, especially if they must spend a lot on health care that Medicare does not cover. Even today, if they have high health care costs or other costly needs, they often struggle to afford care that Medicare does not cover.
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For financial reasons, hospitals around the country are increasingly classifying overnight hospital stays for people with Medicare—even stays that last more than three days—as outpatient visits. The problem is that unless the hospital treats you as a hospital inpatient, Medicare will not cover your skilled nursing facility care post-hospitalization. And, the hospital often has the discretion to classify even lengthy stays as Medicare outpatient hospital care.
According to an analysis of new Congressional Budget Office data by the Kaiser Family Foundation, Medicare is expected to spend an average of $1,000 less this year than originally projected on each person with Medicare, $11,328. That’s a total of $50 billion less in 2014.
By 2019, projected reductions in Medicare spending are expected to be an average of $2,400 for each person with Medicare, $12,545, down from a projection of $14,319. That means Medicare’s total costs will be $120 billion less than what the budget folks in Washington expected.
It’s still hard to know exactly why Medicare is seeing lower costs than originally expected but there are some theories. For one, unnecessary hospital readmissions are dropping. Health care reform incentivized hospitals to ensure Medicare patients get appropriate care when they are first hospitalized. If they need to be readmitted because of inappropriate care received on their first visit, hospitals are penalized financially.
For this survey, Gallup was not able to separate out satisfaction rates for people newly insured in the health insurance exchanges. They plan to do so in future polls as soon as practicable.
The survey also does not speak to the reasons why people over 65 are more satisfied with the health care system than the rest of the population. Joe Baker, president of the Medicare Rights Center, speculates it’s because Medicare and Medicaid coverage are easier to use than private insurance and in most cases provides better protection against financial risk. “For sure, Congress can improve Medicare. But, compared with the hassles of referrals and huge copays and deductibles with private insurance, Medicare is relatively simple.”