Whatever you say about Medicare Advantage–the Medicare health plans administered by private insurance companies–one thing is undeniably true: Medicare Advantage costs more than traditional Medicare and has cost more–all in, more than a hundred billion dollars more–since its inception. But, AHIP, the trade association representing health insurance corporations, is doing its damnedest to deny the high cost of Medicare Advantage, misleading the public on its costs.
In a new report by Wakely, which AHIP commissioned to counter government claims about Medicare Advantage’s high costs, Wakely attempts to support AHIP. But, Wakely concludes its report with the following “limitations,” wholly undercutting its analysis and shifting responsibility for inaccuracies onto AHIP: “The assumptions and resulting estimates included in this report and produced by the model are inherently uncertain. Users of the results should be qualified to use it and understand the results and the inherent uncertainty. Actual results may vary, potentially materially, from our estimates. Wakely based this analysis primarily on CMS published data, which are subject to revision over time. It is the responsibility of AHIP to review the assumptions carefully and notify Wakely of any potential concerns.”
Medicare Advantage costs more than traditional Medicare in three very different ways. Medicare Advantage costs more in dollars spent by the government, about four percent more per percent than traditional Medicare, according to the Medicare Payment Advisory Commission or MedPac. And, it is projected that Medicare Advantage will cost $600 billion more over the next nine years.
Medicare Advantage costs more out of pocket than traditional Medicare with supplemental coverage for people with costly health care needs, in many cases. Annual out-of-pocket costs in Medicare Advantage can be as high as $7,550 for in-network care alone, while supplemental coverage costs about $2,500 a year. Moreover, in some instances, Medicare Advantage plans force people to go out of network if they want to use high quality specialists and top specialty hospitals; then, people must bear all those costs themselves.
Medicare Advantage costs more than traditional Medicare in terms of health and well-being for people whom Medicare Advantage plans keep from getting the care they need. Sometimes, Medicare Advantage enrollees cannot afford their copays and forgo care. Sometimes, people’s Medicare Advantage plans second-guess their treating physicians and inappropriately deny them care. According to the American Hospital Association and many physicians, some people end up with disabling conditions waiting for needed care. Some die, needlessly.
Medicare Advantage is also draining the Medicare Trust Fund needlessly. And, because Medicare Advantage costs the government more money, Medicare Advantage drives up Medicare Part B premiums for everyone with Medicare, including people in traditional Medicare.
Yes, for people fortunate to need relatively little health care, Medicare Advantage costs less than traditional Medicare with supplemental coverage. Anyone who enrolls in Medicare Advantage saves money on the cost of the supplemental coverage they need to fill coverage gaps in traditional Medicare, since traditional Medicare does not have an out-of-pocket cap. But, given all the costs of enrolling in Medicare Advantage and the likelihood that people will need costly care at some point, joining a Medicare Advantage plan could mean playing Russian Roulette with your health.
If Congress is not going to end the Medicare Advantage program altogether, which it should, the government must overhaul it. First and foremost, Medicare must stop paying Medicare Advantage plans a flat upfront fee regardless of the cost or quality of care Medicare Advantage plans cover. Until it does, you can expect that Medicare Advantage plans will take the government’s money and run with as much of it as possible.
Here’s more from Just Care:
- Data show Medicare Advantage covers less nursing, rehab, home health care
- Hospitals find a lot wrong with Medicare Advantage
- Ten ways to improve Medicare Advantage
- Congress proposes reforms to ensure timely access to care in Medicare Advantage
- Congress must overhaul the way it pays Medicare Advantage plans
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