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Medicare DIS-Advantage Part II

by Jen on June 20th, 2008

[In a sarcastic voice:] Thank you, Heritage Foundation, for helping to confuse seniors and encourage them to choose health care plans that both cost more to taxpayers and offer less coverage at a higher price. That’s very noble of you.

Apparently, the definition of “success” is now “spending more, getting less, and ripping off taxpayers and the elderly at the same time.”

I especially love this part:

“Seniors enjoy an unprecedented level of personal freedom in choosing health care options that they think are best for them.”

Note the use of “that they think are best for them.” (emphasis mine) That’s probably because the people marketing Medicare Advantage plans are very good at forgetting to tell seniors that, by signing up, they are foregoing traditional Medicare.

The Heritage Foundation, as a conservative think tank, usually has arguments that go something liek this: private enterprise is awesome because it is more efficient than the government. 

Unfortunately, in health care, this argument just doesn’t hold water. Medicare Advantage plans have been proven again and again to be more expensive than traditional Medicare for taxpayers and for the beneficiaries who sign up for the plans. Medicare Advantage plans are far less efficient than traditional Medicare in terms of the percentage of revenue spent on overhead and administration.

The Heritage Foundation makes the argument that “The health plans cover all of traditional Medicare’s benefits and much more.” This statement isn’t exactly true, either. Medicare Advantage plans may cover more than Medicare Part A, which is the “automatic” part of Medicare covering things like hospitalizations and inpatient care, but the coverage offered by Medicare Advantage programs is often far inferior or much more limiting in terms of access and choice than the coverage offered by regular Part Bplans, sometimes called “MediGap” or “supplementary” insurance. Many Medicare Advantage HMO plans simply don’t offer the same robustness of coverage, choice of specialists. For example, someone with traditional Medicare can have physical or occupational therapy provided as a home visit with a regular copay and no other charges. Many Medicare Advantage HMOs do not offer the home visit benefit, and instead a beneficiary has to travel to a designated provider, whether or not that is the provider the patient would prefer to use.

Promoting Medicare Advantage plans is clearly entrenched in the conservative rhetoric around health care reform, alongside promotion of health savings accounts, high-deductible health plans, and other “consumer driven” reforms. But promotion of these plans without analysis of the underlying costs and the undue burdens they can impose on seniors who (perhaps unwittingly) sign up for them doesn’t offer anything meaningful to the health care reform debate.

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POSTED IN: CMS and Medicare Policy, Health Insurance and Payors, Policies and Politics