Dr. Fieseher: Americans are being tricked into Medicare Advantage Plans
In a recent op-ed by State Senator Rosenwald, she cites “a recent study from Harvard Medical School shows Medicare Advantage to be a critical tool to improve access to affordable healthcare for our most vulnerable patient populations.” The study did have input from Harvard University, but it focused solely on the demographics of who was signing up for Medicare Advantage plans without comparing the plans themselves.
While Harvard was listed first in the name of the report, this was not a Harvard-based study. The principal author of the report was Scott Bilder, an employee of the Inovalon holding company. In reality, this is an Inovalon study with some input from Harvard University. This is no different than getting a phone call with a 603 caller ID area code and discovering the call is actually from somewhere in Asia. Inovalon is not a member of the better business bureau and is currently owned by a private equity corporation.
Medicare Advantage plans are expensive and, according to the Kaiser Family Foundation, cost American taxpayers 104% more than traditional Medicare. But the Inovalon study suggests just the opposite: “Given how MA plans are paid—monthly capitated payments for each member along with additional quality bonuses—they are incentivized in principle to avoid unnecessary utilization, to coordinate care, and to promote better health. They also have flexibility to provide additional benefits that are not offered under FFS, such as dental, vision, and hearing. Finally, they can reduce financial burden to patients—relative to FFS—through lower cost-sharing and subsidized premiums. “
Here’s a breakdown of what that statement means:
Beginning with the first phrase, private insurers are “incentivized to avoid unnecessary utilization.” Since it’s your doctor who determines what is medically necessary or not, that means that someone working for the insurance company (who is usually not a licensed physician) will decide whether or not you’ll get the treatment your doctor wants you to have. “Unnecessary utilization” in the US is rare because state medical boards monitor and protect the public from doctors who are inappropriate or prescribed unnecessary treatments.
Conversely, there is little or no oversight on the private MA insurers who routinely deny necessary doctor-prescribed treatments. Those denials often delay needed medical care or prevent it altogether. Since those denials save money for MA insurers, they are incentivized to deny necessary “utilization” (care), a practice that is commonplace in the US.
MA plans do have the “flexibility to provide additional benefits such as dental, vision and hearing” because those benefits have been "carved out" through lobbying efforts as an incentive to drive people away from traditional Medicare. Regular Medicare could do the same thing if Congress authorized it, which would save the Medicare trust fund millions of dollars by paying for them directly at cost, instead of through a private third party at retail prices.
Signing up for MA plans may be cheaper than traditional Medicare, which justifies the phrase: “can reduce the financial burden to patients relative to FFS” (Fee-for Service, their code for traditional Medicare). Since the Medicare trust fund is maintained through our tax dollars, those relatively inexpensive fees charged by traditional Medicare were designed to stabilize that trust fund. But the MA plans are funded directly through our tax dollars with little accountability, meaning that private companies are draining Medicare designated tax dollars at an alarming rate. In other words, Congress won’t allow traditional Medicare to lower or remove the monthly fees designed to protect the system, but they will allow private companies to plunder the Medicare fund to draw patients away from traditional Medicare.
In contrast to traditional Medicare, Medicare Advantage plans have the ability to deny needed medical treatment prescribed by your health care provider and they can drop a patient at any time if their healthcare expenses are too great. In short, whatever small “perks” MA plans have to offer over traditional Medicare are more than offset by their higher costs to taxpayers as well as the delays and denials of necessary treatments which were authorized by qualified physicians on behalf of their patients.
As the Inovalon study points out, enrollment in Medicare Advantage plans has risen sharply from 17% in 2000 to 48% in 2022. But that isn’t because Medicare Advantage plans are better than traditional Medicare, it’s because they’ve advertised incessantly and have lobbied Congress and the White House (in both Republican and Democratic administrations) to make enrollment in MA the default plan over traditional Medicare.
Traditional Medicare has made it possible for older Americans to get high quality care for decades and should not be jettisoned because private insurance companies have found ways to plunder the trust fund.
James Fieseher MD, of Dover, NH, is a retired family physician.
This article originally appeared on Portsmouth Herald: Dr. Fieseher: Americans being tricked into Medicare Advantage Plans
