Letter to Chairman McGovern and members of the U.S. House of Representatives House Rules Committee in support of the Medicare for All Act of 2019, H.R. 1384, with a focus on its value for older adults:
I want to share my thoughts on a very important and often overlooked aspect of the Medicare for All debate: How Medicare for All will greatly improve the lives of people with Medicare. Any discussion of this issue starts with the unacceptable state of the broader American health insurance system.
Americans of all ages are increasingly being forced to make health care choices no one should have to make. Two in three[i] of us forego needed care in order to afford the rent, the heat, our dinner. In our commercial insurance marketplace, health care choice too often means gambling with our health. Not surprisingly, more than nine in ten Americans[ii] are asking Congress to address health care costs.
Commercial health insurers charge Americans ever higher costs for their care. They have not succeeded at negotiating fair health care prices. Rather, prices are excessive and irrational. The same procedures[iii] cost tens of thousands of dollars more in one hospital than in another. On average, the US spends twice as much[iv] on health care as other wealthy countries; yet, the US ranks at or near bottom on most health outcomes, including infant mortality and life expectancy.
Americans suffer or die needlessly for lack of health care. I recently spoke with one woman, Eve Meikle who was forced to “backburner” treatment for her ulcerative colitis in order to pay for diagnosis and treatment of her daughter’s gastritis. Eve and her family have insurance and an annual income just over $80,000. Still, it will take them years to free themselves of medical debt, and, left untreated, Eve’s condition may very well worsen and keep her from working.
Medicare for All is the only policy proposal before you that controls costs and guarantees health care as a right[v] to everyone. Other proposals on the table– Medicare buy-ins, Medicaid expansion or state-based reforms–neither rein in costs nor make health care affordable for all Americans.
Medicare for All guarantees health care for all. It promotes the public good. It provides greater security to older adults by filling Medicare coverage gaps, eliminating premiums, deductibles and coinsurance, and adding vision, hearing, dental and long-term services and support benefits. And, it does so while reducing national health care spending. It uses the leverage of all Americans to rationalize health care prices and eliminate administrative waste. Even by conservative estimates, it saves $2 trillion[vi] over 10 years. And, if we paid what other countries paid for their drugs, as President Trump and Senator Sanders have both proposed, it would save still more.
Medicare for All builds on Medicare, which has a 50-year track record of providing health and financial security to older and disabled Americans. Medicare has helped significantly to reduce the poverty rate among older adults, which has fallen from 29 percent in 1965 to nine percent in 2016.[vii]
Medicare works. I know firsthand. I am the founder and past president of the Medicare Rights Center, a national not-for-profit consumer service organization.
Medicare works because it is designed to meet the needs of everyone, including people in poor health with costly conditions. It works because it gives people the freedom to travel or move in with an out-of-area family caregiver and see the doctors they want to see, wherever in the US they happen to be. Medicare works because it allows its enrollees, their children and grandchildren, to sleep at night knowing they can and will get the care they need. Still, three in four older adults say the government is not doing enough to address health care costs.[viii]
Medicare for All would significantly improve the health and financial security of older Americans. Older adults are counting on you[ix] to expand Medicare benefits. Older adults, much like their kids, increasingly struggle to pay for health care that Medicare does not cover. One in four of them have less than $15,000 in savings.[x] Half live on annual incomes under $26,200.[xi] Social Security benefits are critical, but inadequate, to cover many basic needs. Private sector retiree benefits have eroded.
Even with Medicare, Americans have thousands of dollars in out-of-pocket health care costs for hearing, dental, vision and long-term services and supports. They also need supplemental coverage to fill Medicare coverage gaps and protect themselves financially, which can be extremely costly. A Gallup poll[xii] released last week reveals that one in seven older adults, 7.5 million people, are unable to pay for the medicines their doctors prescribe. And, of those, eight in ten say that these medicines are for a somewhat or very serious condition.
Traditional Medicare, without supplemental coverage, has high out-of-pocket costs and no catastrophic cap. For this reason, many older Americans have no choice but to sign up for commercial Medicare plans, known as Medicare Advantage plans, which have a catastrophic cap. The commercial Medicare Advantage system is a looming tragedy for older Americans that can only be addressed through Medicare for All.
Commercial Medicare plans offer lower upfront costs than people with government-administered Medicare. Older and disabled Americans enroll in Medicare Advantage plans hoping to save money. But, there is compelling reason for serious concern that Medicare Advantage plans are keeping enrollees from getting needed care, jeopardizing their health, and overcharging the government and taxpayers. I want to highlight these three big issues.
Wrongful Delays and Denials of Care
Medicare Advantage plans routinely and improperly delay or deny coverage for needed care. The Office of the Inspector General[xiii] reports that audits by the Centers for Medicare and Medicaid Services (CMS) reveal “widespread and persistent [Medicare Advantage] performance problems related to denials of care and payment.” This should come as no surprise. The less care they deliver, the more Medicare Advantage plans profit.
CMS has sanctioned dozens of commercial Medicare plans[xiv] for, among other things, “threatening the health and safety” of their members and “charging incorrect copayments to enrollees for medical services.”
Poor Quality Care
In addition, Medicare Advantage plans may prevent their enrollees from receiving good quality care. A recent study published in Health Affairs[xv] shows that Medicare Advantage plans send enrollees to lower quality nursing facilities than traditional Medicare. Research soon to be published shows that Medicare Advantage enrollees generally have less access to top hospitals than people in traditional Medicare. They also lack access to higher quality home care.
A recent study in JAMA Internal Medicine[xvi] shows that people with significant health care needs are disenrolling from Medicare Advantage plans to traditional Medicare at far higher rates than people without significant health needs.
In addition, Medicare Advantage enrollees cannot rely on continuity of care from their doctors. Kaiser Health News[xvii] reported earlier this month on a cancer patient in a Medicare Advantage plan who is losing the in-network doctors who have kept her alive over the last several years but are no longer in-network. She cannot afford to pay out-of-pocket for her doctors’ out-of-network services.
No trustworthy public data is available as to which, if any, Medicare Advantage plans promote access to quality providers and good care. The current five-star rating system for Medicare Advantage plans is regarded as a farce. CMS policy[xviii] permits a Medicare Advantage plan to get a five-star rating even though CMS has sanctioned[xix] it for threatening the health and safety of its members and has “a longstanding history of noncompliance with CMS requirements.”
Of concern as well, government overpayments to Medicare Advantage plans appear significant. Congress entrusts commercial Medicare Advantage plans with covering the healthcare of our most vulnerable citizens at significant taxpayer expense. Yet we know from government audits that the Medicare Advantage plans bill taxpayers for tens of billions of dollars[xx] they are not due. They “upcode,” services, improperly claiming the health status of their enrollees is worse than it is in order to generate higher payments.
The GAO[xxi] reports that the Centers for Medicare and Medicaid Services identified $14.1 billion in overpayments to Medicare Advantage plans in 2014 alone but that CMS is not recovering nearly as much in improper payments as it could with better oversight.
A more recent study published in Health Services Research[xxii] estimates that “upcoding” by Medicare Advantage plans could account for as much as 13 percent of payments[xxiii] to Medicare Advantage plans and increase Medicare spending over ten years by $200 billion. And, it is not clear whether CMS can recoup this money.[xxiv]
The litany of wrongful and harmful behaviors by Medicare Advantage plans is likely greater than we know. Critical Medicare Advantage data is unavailable for analysis. We know more about how restaurants, automobiles and televisions perform and rank against one another than we do about Medicare Advantage plans. Yet, the government paid them $210 billion in 2017[xxv] alone.
With or without the data, we know that commercial health insurers are hard-pressed to meet the needs of people with Medicare or anyone else who develops a complex and costly condition. Imagine the best commercial health insurance company in the US. Let’s promise that it will always provide high value care for people with stroke, cancer and heart disease. This best health insurance company would be out of business before it opened its doors. Everyone in poor health would join, driving premiums up so high that no one could afford them. To make a profit, commercial health plans must compete to avoid high-cost enrollees.[xxvi]
Instead of meeting our needs, commercial health insurers offer little health or financial security. They can and do change their network providers all the time, keep doctors from providing the care their patients need, shift costs onto their members who most need care and pull out of markets. They do whatever they need to do to promote their business interests.
Medicare for All—an improved and expanded Medicare system—can do what commercial health insurance can never do: Protect Americans from the high cost of health care, while ensuring access to good quality care.
To some, Medicare for All may seem too big a change too quickly. For Americans, the change could not come quickly enough.
Thank you for your consideration.
[iv] Peterson Kaiser Health System Tracker: https://www.healthsystemtracker.org/chart-collection/health-spending-u-s-compare-countries/
[v] Political Economy Research Institute: https://www.peri.umass.edu/publication/item/1127-economic-analysis-of-medicare-for-all
[vi] Blahous, Charles, The Costs of a National Single-Payer Health Care System: https://www.mercatus.org/system/files/blahous-costs-medicare-mercatus-working-paper-v1_1.pdf
[vii] Joint Economic Committee, Democrats, Medicare: Protecting Seniors and Families: https://www.jec.senate.gov/public/_cache/files/5f4be5d9-b297-467a-948a-e7525d04f924/medicare-final.pdf
[x] Kaiser Family Foundation: http://files.kff.org/attachment/Issue-Brief-Income-and-Assets-of-Medicare-Beneficiaries-2016-2035
[xi] Kaiser Family Foundation: https://www.kff.org/medicare/issue-brief/how-many-seniors-live-in-poverty/
[xiii] Office of the Inspector General: https://www.oig.hhs.gov/oei/reports/oei-09-16-00410.pdf
[xv] Meyers, David J. et al., Health Affairs: https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2017.0714
[xvi] JAMA Internal Medicine: https://jamanetwork.com/journals/jamainternalmedicine/article-abstract/2725083
[xxii] Health Services Research: https://onlinelibrary.wiley.com/doi/full/10.1111/1475-6773.12977
[xxiii] Van de Water, Paul, Center on Budget and Policy Priorities: https://www.cbpp.org/blog/medicare-advantage-upcoding-overpayments-require-attention
[xxiv] UnitedHealthcare Insurance Company, et al. v. Alex M. Azar II, et al., Secretary of the Department of Health and Human Services: https://s3.amazonaws.com/assets.fiercemarkets.net/public/004-Healthcare/external_Q32018/UHvBurwell_overpayments.pdf
[xxv] Cubanski, Juliette and Neuman, Tricia, Kaiser Family Foundation: https://www.kff.org/medicare/issue-brief/the-facts-on-medicare-spending-and-financing/
[xxvi] Archer, Diane and Marmor, Theodore, Health Affairs, Medicare and Commercial Health Insurance: The Fundamental Difference: https://www.healthaffairs.org/do/10.1377/hblog20120215.016980/full/